Bankruptcy is a legal status granted to an individual or other entity in the event of failure to repay debts to creditors, often initiated by the debtor and approved by the court order in most jurisdictions. The laws are not same in all countries and in the United States, bankruptcy refers to formal insolvency proceedings and is governed by federal law. Hence, while the cases are filed in United States Bankruptcy Court, the unit of United States Bankruptcy Court, federal law governs bankruptcy procedure and state laws are applied when there is a need to ascertain property rights. A discharge under the Bankruptcy Code in United States is one of the key benefits provided as relief that aids debtors to a “fresh start” following bankruptcy.
The bankruptcy laws applicability in United States?
Under the law, a filing of petition is allowed under various chapters of the Bankruptcy Code, depending upon circumstances. Filing under Chapter 7 is the most usual form of bankruptcy. Chapter 7 applies to the cases where bankrupt estate doesn’t have non-exempt assets, called “no assets”, to fund a disbursement to creditors. Chapter 9 is not liquidation, but a reorganization, and applies to municipalities only. Chapter 11, Chapter 12, or Chapter 13 is more complex reorganization that permits a debtor to retain the property, either in part or full, for future earnings to pay off creditors. Chapter 12, although similar to Chapter 13, is available only to “family farmers” and “family fisherman” in certain situations and has more liberal terms for debtors. Individuals file Chapter 7 or 13 generally, but hardly under Chapter 11. A San Diego bankruptcy lawyer can better help you with the applicability chapters for filing in California court.
How to apply for relief
You can file a petition in the California court through bankruptcy attorney San Diego. Hire the best bankruptcy lawyer San Diego who can assist you in getting relief from the court under appropriate chapter.