The purpose of a bankruptcy is to protect you from adverse creditor action. With limited exception, the minute your attorney presses the “file case” button on his computer, you and your assets are protected by the bankruptcy law’s automatic stay. Because bankruptcy is a legal proceeding you will have to attend court (usually for a brief hearing only) and everything you include in your bankruptcy petition must be truthful, under penalty of perjury.
The laws that control how bankruptcy work are found in Title II of the United States Code – you can read the provisions of the Bankruptcy Code by clicking on the link.
The Bankruptcy Code was written by the men and women in the Congress, and was signed into law by the President. Periodically the Code is revised and parts of the bankruptcy laws are changed. The most recent major change to the Bankruptcy Code occurred in 2005, when Congress changed the law to make bankruptcy filing more difficult. Lobbyists working on behalf of banks, credit card issuers and finance companies spent millions of dollars to convince Congress to enact what are known as the BAPCPA amendments. BAPCPA stands for “Bankruptcy Abuse Prevention and Consumer Protection Act,” which is somewhat of an Orwellian name since there is very little in the way of consumer protection in the BAPCPA amendments.
Chapters of the United States Bankruptcy Code
The Bankruptcy Code is divided in to a number of chapters, some of which give their name to specific types of bankruptcy. The “consumer” chapters are Chapter 7 and Chapter 13 – but there are other types of bankruptcies that exist – for example Chapter 11 functions as a business reorganization, Chapter 12 serves as a debt reorganization for family farmers and Chapter 9 operates to allow local governments to reorganize.
You should think carefully about the decision to file for bankruptcy. Once your case is opened and a case number assigned, your credit report will show that you have sought protection from the bankruptcy court. Even if your case later gets dismissed – either voluntarily or by court action – your credit report will show that you have filed a bankruptcy.
Experienced consumer bankruptcy lawyers can help you decide if bankruptcy makes sense for you, how to best prepare for your filing and what type of bankruptcy to file. David Galler of GallerLaw has represented consumer bankruptcy debtors for over 30 years and they invite you to call or email today with your bankruptcy questions.