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A bankruptcy is a legal declaration that an individual or organization is unable to pay its creditors or debts. Bankruptcy filings are mostly regulated by laws under the jurisdiction of the federal government. The validity of bankruptcy claims and exemptions are governed by state law and vary from state to state.
The Bankruptcy Court has no jurisdiction over credit reporting agencies. The Fair Credit Reporting Act, 6 U.S.C. Section 605, is the law that controls credit reporting agencies. The law states that credit reporting agencies may not report a bankruptcy case on a person`s credit report after ten years from the date the bankruptcy case is filed. Other bad credit information is removed after seven years. The larger credit reporting agencies belong to an organization called the Associated Credit Bureaus. The policy of the Associated Credit Bureaus is to remove chapter 11 and chapter 13 cases from the credit report after seven years to encourage debtors to file under these chapters.
Depending on the type of bankruptcy proceedings that you wish to file, there are different eligibility requirements that are set by federal law, and thus apply equally to all states. For instance, there are household income eligibility requirements for persons who wish to file Chapter 7 bankruptcy in order to completely discharge their debts. On the other hand, there are limitations on the types and amounts of debts that you can have if you are looking to file for Chapter 13 bankruptcy reorganization proceedings. Therefore, your eligibility to file bankruptcy will vary based on your personal financial situation and the type of bankruptcy relief that you are seeking.
Not necessarily, each state has laws that determine which items or property are exempt from being taken away. For example, many states exempt personal items such as furniture and clothing. In addition, other kinds of property are exempt up to a limit. These exemption limits mean that any equity that you have in the property above the limit is not exempt. The Bankruptcy Court can take the property and sell it, pay off any creditors, give to you the exemption amount, and keep the rest for other creditors.
If you are married, you may file a joint petition. A joint petition is the filing of a single petition by an individual and the individual`s spouse. In order to qualify for a joint petition, you must be married on the date that the joint petition is filed. Unmarried persons, corporations and partnerships must each file a separate case. If you are an individual and have a business, you may not file a single petition for yourself and your business; each must be a separate bankruptcy case.
The time periods between bankruptcies depends on the type of the previous filing and the type of new filing. If your new filing is a Chapter 7, you must wait eight (8) years from last filing of a Chapter 7, or six (6) years from last filing of Chapter 13. If your new filing is a Chapter 13, you must wait four (4) years from last filing of Chapter 7 or two (2) years after a discharge of a previous Chapter 13 case.
Any person, partnership, corporation or business trust may file bankruptcy. In addition, charitable or social organizations may also file for bankruptcy. United States citizenship is not a requirement for filing bankruptcy.
Federal law does not require you to have an attorney. You are allowed to file pro se, that is, on your own without an attorney. However, without the assistance of an attorney, it is extremely difficult to do so successfully.
Hiring a competent bankruptcy attorney is highly recommended as bankruptcy has many long-term financial and legal consequences.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified bankruptcy lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local bankruptcy attorney to discuss your specific legal situation.