Bankruptcy Codes And You

Even though most people don't consider themselves at a financial risk for bankruptcy, the sad statistics are that today more and more people are heading that direction. In fact, the various forms of bankruptcy such as chapter 7, chapter 13, and even chapter 11 are becoming a more popular financial out for people and businesses each and every day.

The U.S. bankruptcy laws were put in place by Congress in order to provide uniformity to the code and statutes throughout the United States. The bankruptcy laws were actually put in place to protect people from doing further financial harm.

At the time of this writing there are currently four different chapters to the bankruptcy code. For example, you may be familiar with the bankruptcy term Chapter 7 bankruptcy. The chapter 7 part is the section of code or the statutes that address the rules and regulations of Chapter 7 bankruptcy.

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.

The individual states can have and pass their own statutes concerning bankruptcy laws or codes. However, any statue that a state may be considering for law must still work within the framework of the Federal bankruptcy codes.

So, even though the individual states cannot change the intent of the Federal bankruptcy laws, each state can however, interpret how the claims must be filed and how the claims are acted upon.

As is the case with statutes, they tend to be somewhat dynamic; meaning they change with additions and deletions to the code over time as amendments are ratified through the body of lawmakers. Because of this dynamic, it is a very good idea for an individual considering bankruptcy as an option to seek the counsel of an attorney who deals in the area of bankruptcy code.

Any change to the base bankruptcy laws of the U.S. will be originated from Congress itself. An example of such came with the filing requirements of a Chapter 7 bankruptcy. This particular changed effected the primary rules for the filing in that it added additional burden of proof on the person filing to have met the specific criteria and as such would 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.

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