Bankruptcy Law is an area of law dealing with certain formal procedures that a debtor must follow in filing for bankruptcy. Bankruptcy Law is very complicated and it can confuse even the most experienced attorney. Bankruptcy Law is very different than Regular Law because a bankruptcy proceeding is not a court proceeding and it is not obligatory for the Court to grant approval. Therefore, there is no need for a bankruptcy lawyer unless you are considering the full issues surrounding bankruptcy.
The main function of the bankruptcy lawyer is to assist the debtor-creditor relations between the two parties. Bankruptcy Law deals with various intricacies that can make even the most experienced attorneys confused. For example, under Federal Bankruptcy Law, there is an extended process required for filing for bankruptcy and this has been implemented to encourage efficient and timely service of debtors. This extended filing process ensures the reliable service of debtors by minimizing the burden of filing for bankruptcy. Bankruptcy Law involves various technical details and it is always advisable for any person to seek professional help from an attorney.
Federal Bankruptcy Law is structured as seven chapters that follow. Chapter One provides for the basic framework for understanding and providing services relating to the liquidation of business assets. Under chapter one, the debtor and the creditor will decide on the distribution of the remaining assets. Chapter Two covers new laws and procedures governing the administration of chapter 13 liquidation. There is also a detailed description of the various options available to a debtor when he or she is considering a fresh start after chapter 13 bankruptcy.
Chapter Three details rules governing the collection of payment from both debtors and creditors. The next chapters deal with methods of collecting payment from insolvent debtors and those assets which have been recommended by the bankruptcy court in its assessment of the debtor’s solvency. The laws detail the rights of the creditors to pursue insolvent debtors and the duties of the United States trustee.
Chapter Four describes circumstances under which the discharge of the debts can be applied for. It provides for the different types of discharge of debts such as voluntary liquidation, involuntary liquidation and trustee auction. Chapter Five provides for laws governing the collection and repossession of properties, debts owed to unsecured creditors, debts owed to secured creditors and regulations concerning the distribution of surplus cash among all the debtors. There is also a detailed description under chapter five of the types of trustee proceedings that can be instituted by the trustee.
Chapter Six deals with the procedure of settling debts with the insolvent debtor and among creditors. The debtor and the creditors must enter into a bankruptcy agreement. Chapter Seven provides for various procedural formalities that must be complied with in order to file a bankruptcy case under the appropriate authority. The bankruptcy law also deals with guidelines as to how an individual can go about filing for bankruptcy and the implications involved in such proceedings.