Bankruptcy law has evolved from several sources throughout history. In the fifteenth century, laws concerning the treatment of absconding debtors were passed in various Italian cities and spread throughout western Europe. These laws were more lenient and applied to merchants than to individuals. The first bankruptcy act in England was passed in 1542/43 and was based on Flemish custom. Other countries soon followed suit. In 1582, the city of Antwerp published the customs of Antwerp which contained comprehensive rules for the treatment of bankrupts. Several years later, in 1531, emperor Charles V inserted stricter provisions into this act.
Filing for bankruptcy requires the debtor to fill out numerous forms and submit financial information to the U.S. Bankruptcy Court in the bankruptcy district of the debtor’s residence. Besides financial statements, debtors must also submit tax returns and income documents. Bank account statements and mortgage statements must also be provided. In addition, debtors must complete a pre-bankruptcy debtor education course and take credit counseling.
In addition to federal laws, many states have enacted their own laws affecting debtor-creditor relations. These laws affect bankruptcy law, which carved out exceptions for property based on state law. Exempt property is defined differently in each state. You can find a complete list of these on several reference pages. In addition to federal bankruptcy laws, you need to be aware of the Securities Investor Protection Act (SIPA) and the Service Members Civil Relief Act.
Bankruptcy law is one of the most regulated areas of law, and many companies must restructure their finances in order to keep their business operating. Companies must analyze the existing regulations, statutes, and judicial precedent to ensure that they are complying with all legal requirements. The Department of Justice also monitors the bankruptcy process, including the distribution of assets to creditors. Updates on relevant litigation and the bankruptcy process are published in the National Law Review.
Chapter 11 allows businesses to stay open while they restructure their debts and pay off their creditors over time. This type of bankruptcy is the most expensive, lengthy, and complex of the three types of bankruptcy law. Major corporations often file under chapter 11 and pay a higher filing fee than their counterparts in chapter 7. Further, these cases can take many years to conclude. There is a bankruptcy law guide for everyone – whether it’s a business or an individual.
Chapter 13 allows debtors to keep most of their property. They are required to follow all requirements of the plan, including those regarding co-signers. If the plan is confirmed, the court will disburse the funds according to the terms of the plan. Chapter 13 can also protect the debtor’s co-signers. It is important to remember that Chapter 7 and Chapter 13 bankruptcy law are both legal options for filing for bankruptcy. There are benefits to both.
Chapter 13 allows a debtor to keep more of their property and pay back their debts over an extended period of time. Usually, this plan takes three to five years to finish. It can save a home or a business from foreclosure. By stopping foreclosure, this option allows the debtor to catch up on mortgage payments. Ultimately, this type of bankruptcy helps individuals regain financial stability. So, when considering bankruptcy, be sure to read the details carefully.