Bankruptcy: Introduction

Hopefully this guide will be a useful starting point; however, when researching an unfamiliar area of the law, a useful search strategy is to begin with a secondary source. If you are not familiar with the topic, you may find that other research guides or tutorials are useful to assist with research. Once you have some background information about bankruptcy, you can go to the primary sources such as statutes, regulations, and court rules.

Additional research guides:

Bankruptcy Law Research Guide, Georgetown Law Library

LexisNexis Bankruptcy Research Guide

Bankruptcy, Harvard Law School

For further general explanation, information and videos on different chapters under which a bankruptcy case may be filed check out Bankruptcy Basics. 

Bankruptcy Basics is not a substitute for the advice of competent legal counsel or a financial expert, nor is it a step-by-step guide for filing for bankruptcy, rather it is a publication of the Bankruptcy Judges Division of the Administrative Office of the U.S. Courts providing basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of federal bankruptcy laws.

Automatic Stay

• An injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.  Exempt Property

Claims and Priorities

• The Bankruptcy Code's statutory ranking of unsecured claims that determines the order in which unsecured claims will be paid if there is not enough money to pay all unsecured claims in full.

Leases and Executory Contracts

• Generally includes contracts or leases under which both parties to the agreement have duties remaining to be performed. (If a contract or lease is executory, a debtor may assume it or reject it.)

Discharge

• A release of a debtor from personal liability for certain dischargeable debts set forth in the Bankruptcy Code. (A discharge releases a debtor from personal liability for certain debts known as dischargeable debts and prevents the creditors owed those debts from taking any action against the debtor to collect the debts. The discharge also prohibits creditors from communicating with the debtor regarding the debt, including telephone calls, letters, and personal contact.)

Definitions by USCourts

Through bankruptcy laws, debtors are allowed a fresh start to resolve their financial issues either through liquidation or payment plans.  While individuals primarily may choose from two types of bankruptcy, the U.S. Bankruptcy Code spells out five separate chapters or methods of bankruptcy. Most cases are filed under three main chapters of the Code — Chapter 7, Chapter 11, and Chapter 13.

Debtor is a person who has filed a petition for relief under the Bankruptcy Code.

Liquidation is a sale of the debtor's property with the proceeds to be used for the benefit of the creditor.

Payment Plan is a debtor's detailed description of how the debtor proposes to pay creditors' claims over a fixed period of time.

Bankruptcy Code is the informal name for title 11 of the United States Code (11 U.S.C. §§ 101-1330), the federal bankruptcy law. 

Chapter 7 is the chapter of the Bankruptcy Code providing for "liquidation," (i.e., the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.)

Chapter 11 is the chapter of the Bankruptcy Code providing (generally) for reorganization, usually involving a corporation or partnership. (A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.)

Chapter 13 is the chapter of the Bankruptcy Code providing for adjustment of debts of an individual with regular income. (Chapter 13 allows a debtor to keep property and pay debts over time, usually three to five years.)

Definitions by USCourts

United States Federal Bankruptcy Courts have jurisdiction over bankruptcy law. Most federal districts have separate Bankruptcy Court for federal filings. Bankruptcy cases cannot be filed in state court.

Bankruptcy Judges are not Article III judges, they are appointed by the Court of Appeals. District Courts can hear appeals on final judgments, orders and decrees of bankruptcy judges and discretionary jurisdiction on other matters. Some jurisdictions have Bankruptcy Appellate Panels, and Federal Circuit Courts also have jurisdiction to hear appeals. Overall, appeals process is jurisdiction specific.

Bankruptcy statutes are codified in U.S.C. Title 11.

For more information on statutes and regulations regarding Bankruptcy law click on the Statutes and Regulations tab above.

Federal Rules of Bankruptcy Procedure are a set of directive procedures enacted by Congress for the United States Bankruptcy Courts.

Official Bankruptcy Forms are used to file a bankruptcy claim. The forms can be found on the Bankruptcy Court Website as well as bankruptcy procedure forms which may be necessary the process of a case.

See the Case Law tab above for more information

Disclaimer:

The information and links provided in this guide are not intended to provide legal advice.  The FAMU College of Law Library offers no assurance or guarantee the information provided is accurate or current.

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