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How Bankruptcy Laws Work

By: Letha Lashley

Heading toward bankruptcy is usually something that most people don't even consider having happen in their lifetime. But statistics today prove differently. The reality of bankruptcy today is that there are increasing numbers of people that are entering the bankruptcy system. The different chapters of bankruptcy (chapter 7, chapter 11, chapter 13) are becoming more and more prevalent today.



The United States Congress originally put the U.S. bankruptcy laws into place in order to provide a more consistent approach for people considering bankruptcy no matter which state that they may have lived. The philosophy behind the bankruptcy laws is to offer people who are struggling with no hope a vehicle to stop continuing to due financial harm to themselves.



Currently there are four different sections or chapters to the bankruptcy statutes. For instance, you'll probably recognize such bankruptcy terminology as chapter 11... which is the section of bankruptcy code that can be found in chapter 11 of the statute.



Each of the various bankruptcy chapters have their own unique set of rules, regulations, and statutes as they pertain to the filing procedures, how the debt is ultimately relieved, and how the creditors are affected and what their rights are in the procedure or chapter.



Although the bankruptcy codes were provided for by the U.S. federal government, each state has the right to pass other laws that will work within the framework of the federal statutes on bankruptcy; otherwise the states don't have autonomous power to govern how the overall bankruptcy code functions.



Keep in mind however, that even thought the states can't change or amend the basic intent of the core bankruptcy laws, they do have the latitude to interpret how the filings take place and how the laws should be applied.



If you've not considered the dynamic nature of statutes, you would be well advised to. Bankruptcy statutes (just like all statutes)are dynamic in nature. They can and do change at the local (and Federal level)based on the lawmakers either adding amendments to the current statutes or adding completely new sections to the chapters themselves. Because of this it would be a good idea for anyone considering taking the bankruptcy route to consult with the appropriate counsel.



Any type of change to the top level of the bankruptcy codes and statutes will have to come from the United States Congress. On such change has come down the pike as it pertains to the filing of a Chapter 7 bankruptcy. The change to the core statute to this chapter had to do with the burden of proof. Essentially, it added additional criteria (or burden of proof)upon the person filing in order for them to meet the criteria necessary to have the right to file for bankruptcy.



Because of the influx of people entering the bankruptcy system, this type of change to the core bankruptcy statutes was put in place. Now, across all states, if someone is seeking bankruptcy protection under the law; they are required to complete a court appointed financial and bankruptcy counseling session. This was done to help protect the system and creditors from those who just wanted not to pay off their debts.

Article Source: Free Content Articles Directory

For more information on banruptcy codes, be sure to visit onwebnet.com where you'll find information on topics such as bankruptcy laws, chapter 7 bankruptcy, bankruptcy filing & more

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