Know About Federal Bankruptcy Law

Mar 10th, 2014 | By | Category: Debt

One of the needs of the recently changed bankruptcy laws is that they attend mandatory credit counseling, for the consumer. To a certain extent, this is foolish, since many bankruptcy filings aren’t due to financial mismanagement on the share of the consumer but are attributable to circumstances outside the control of the consumer, such as huge medical bills, a job layoff, a messy divorce, etc. In this case, credit counseling may be useful to an extent, but it was the wrong reason that bankruptcy is being considered. Nonetheless, credit counseling is a requirement and there’s no way around that.

Policymakers are working behind the scenes to come up with a way to let states declare bankruptcy and get out from under crushing debts, including the pensions they have promised to retired public workers. Unlike cities, the states are barred from seeking protection in federal bankruptcy court. Any effort to change that status would have to clear high constitutional hurdles because the states are considered sovereign. But proponents say some states are so burdened that the only feasible way out may …

What is federal bankruptcy law?
Please explain the federal bankruptcy law, I want to file for bankruptcy but before filing i need to know federal bankruptcy law.

  • Federal bankruptcy laws are only for companies and firms that wish to file for bankruptcy, individuals cannot go for these options. Chapter 11 and Chapter 7 are the two main categories of federal bankruptcy laws that businesses can choose from. Chapter 11 provides the company or firm with an opportunity to rebuild the business in spite of crippling debts. The federal court plays an active part in such cases, as it has to give the approval for all the business decisions made once the case is filed. Chapter 11 is preferred to Chapter 7 because the company will not be closed to liquidate its assets in this instance. Also, unlike in Chapter 7, the company does not become a security asset for lien and can still be run as usual. Like a trustee in Chapter 7 and Chapter 13 cases, the SEC plays an important role in Chapter 11. The SEC has to determine if the case is fraudulent and if the company or firm really needs to file the case instead of just pretension for the benefit of the shareholders and investors. If the company is involved in trading after it has filed for bankruptcy, then the details relating to such must be registered with the SEC. For More Info fill up small application form our expert will contact you soon :

  • Moving The Discussion Forward

    Bankruptcy law is always evolving even though the majority of its rules and regulations are mostly not impacted by this continual stream of changes. Did you know that a large number of states actually have their own specific bankruptcy laws in place? These laws serve to decipher the methods people file for bankruptcy. However, if this is in trouble with the federal law then federal law will prevail. What this means to you is that you’ll not have any advantage if you file for bankruptcy in a foreign state than the condition in which you normally reside. In fact, most states don’t enable you to file in a jurisdiction other than the one you reside in.
    Devastated by the recession, the city of Stockton, Calif., is trying to renegotiate its debts in a bankruptcy case that could set an important precedent on whether courts can forcibly reduce the pensions of government employees. Like many cities hit hard by the bursting of the housing bubble, Stockton found its finances in a mess. Even after drastic cuts to city services that have sent the crime rate soaring, the city of 300,000 people about 80 miles east of San Francisco …


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