Bankruptcy in the United States of America

In the year of 2008 there was over 1,000,000 bankruptcy cases in the United States.

One day in a courthouse,a trustee heard 52 cases of bankruptcy alone.

This Chapter on Bankruptcy will be dealing with the liquidation under chapter 7 of the bankruptcy laws.

Chapter 7 is the most common of the bankruptcy laws,and involves the appointment of a trustee who collects and distributes the non-exempt property of the debtor,then sells it and distributes the proceeds to the creditors.

Also you may of heard that you cannot file bankruptcy on credit cards.

That is a myth,so don't let people tell you otherwise.

Each state has their own laws which allows for the debtor to keep essential property such as a home.The way youkeep your home is under the Homestead Act.

Each state sets a ceiling price on the homes in their state.

This assures the debtor of being able to keep their home.

Most Chapter 7 cases are no-asset cases,which means that the debtors keep all their property.

When you file for bankruptcy it is a good idea to hire a bankruptcy lawyer to represent you,as there is a lot of paper work involved.

You may have noticed The the bold writing for bankruptcy lawyer.

That is because I have seen a regular lawyer represent people and not have the proper documentation,when they went before the trustee.

This can be a big problem for a person if you haven't been informed about the homestead act or brought your checking account balance down to the required minimum.

The trustee can and sometimes will take those possessions from you and sell them to pay your debtors. 

Most lawyers charge around $2000 dollars for representing you in Federal Court.

What the lawyer will have you do is immediately go to your county court house and file a homestead deed on your home.

This will cost you under $20 dollars in most states.

You will now write down all the bills you pay monthly.

He will ask you to provide a copy of all your bank accounts,and explain that you can't have but $1000 in your account.

You cannot use your credit cards to buy anything after you give the lawyer all your information on the debts you owe for each card.

You will itemize all your jewellry,fishing gear,guns,antiques,furniture etc.

You will get an appraisal from three car dealers for each auto you own.

You will tell your lawyer which car you would like to keep.

You cannot own an auto that appraises for more then $6000.

The trustee will sell you auto and you will have the right to buy it back from the auction.

The problem with this is you are broke right?

You need a drivers license and a social security card when you go before the trustee,so he can varify who you are.

You will be asked questions concerning why you filed bankruptcy,and if you are filing because of a buisness gone bad,an Internal Revenue Agent will tell you that you cannot run your buisness anymore,in other words you will be ordered to cease and desist from any buisness dealings.

After your hearing the trustee will tell you that your creditors have 60 days to file a fraud charge against you for using their money,knowing that you would be filing bankruptcy.

You will most likely get a letter from the lawyer who represented you in court about this matter.

You will write the reasons why you used the money and your lawyer will mail it back to the creditors.

Most generally the creditors will not pursue the matter any further,as they know you are broke.

It is wise to have your lawyer represent you in this matter.

It will cost you around another $1000 to do this,but is worth the price.