The Bankruptcy Code prescribes Chapter 7 as liquidation chapter, informally denoted as “straight bankruptcy”. According to Chapter 7 a trustee is appointed to come into your property possession. This may be an individual or organization authorized to hold property on behalf of another and manage assets.

To pay your creditors, any possession of value will be put up for sale or be converted into money. The state law your file is subjected to, you may be able to retain some of your intangible, tangible and real property (land and anything constantly attached to it). Being able to pay off your debt and having considered sensible and essential everyday expenditure, you may not be eligible for exemption under this chapter.

Chapter 13 bankruptcy

Chapter 13 is often designated as the “wage earner” one. A person with fixed income that owes, on the filing date, non-contingent, discharged, unsecured debts of less than 269,250 dollars and non-contingent, discharged, secured debts of less than 807,750 dollars.

Otherwise, this may be a person with fixed income and such person’s spouse, excluding a share broker or a commodities broker, that owe, on the filing date, non-contingent, discharged, unsecured debts that total less than 269,250 dollars and non-contingent, discharged, secured debts of less than 807,750 dollars.

According to Chapter 13 one pays off debts or a part of those by means of a repayment plan. Under this chapter, the property remains in debtor’s possession. However, a person must have income or some other basis of fixed income. Besides, the repayment plan and budget must be endorsed by the Court.

The payments from the person are collected by a selected trustee who will accordingly pay the lenders and supervise the debtor’s fulfillment of the terms of the repayment plan. After all payments are terminated under the payment plan, the person will be given discharge.

Chapter 11 bankruptcy

A chapter 11 bankruptcy has to do with business reorganizations (when businesses and individuals are adjusting their finance dealings). Chapter 11 allows making payments to creditors by means of a reorganization plan. In this case a trustee is not appointed. However, the company should present the payment plan that would permit the debtor to go on in business.

Trustee and attorney to file for bankruptcy

A part of the Department of Justice, which monitors all bankruptcy cases, is referred to as the US Trustee’s Office. A Trustee is a person chosen by the US Trustee to oversee and manage a certain case.

An official of the Department of Justice is in charge of monitoring the management of bankruptcy cases, estates, and trustees. Besides, his competition includes managing plans and disclosure statements, creditors’ committees, fee applications and performing other enacted duties.

An individual filing for bankruptcy may submit own case. Still, a corporation or partnership must file with the aid of an attorney.

Bankruptcy Discharge

A discharge is a Court Order releasing a debtor from paying off certain debts. Creditors cannot compel payment identified as dischargeable debts from you (take property or collect the debts). The discharge also proscribes lenders not to communicate with the debtor concerning the debt. Here go communication by phone and in writing or getting in touch with personally.

Nevertheless, there are several exceptions. Under Chapter 7 a discharge does not exempt from payment of:

• alimony

• tax debts

• restitution

• student loans

• court-ordered fines

• child support obligations

• debts created by fraud/drunk driving

Besides, if you hide property, destroy, falsify, or conceal records or make a perjury, your discharge may be forbidden totally. A creditor may try to come into possession of collateral that secures payment of the debt. For your personal circumstances, you should consult an attorney to learn which debts are dischargeable.

To get the application forms and information on filing for bankruptcy, apply to your local Bankruptcy Court or your Attorney. If you need a copy of some document, contact your local Bankruptcy Court.

To find out when the case will be closed, you should speak to your attorney concerning the closing of your case. To know the status of your case, contact your local Bankruptcy Court. Usually, the cases are closed as showed in the table below.

Chapter and case type	Time
Chapter 7 no-asset case	60-90 days after the 341 Meeting of Creditors¹
60-90 days after the 341 Meeting of Creditors²	90-120 days after a filing Final Report and after all assets have been managed
Chapter 11 case	after a Final Decree is entered
Chapter 13 case	60-90 days after the Final Report is filed (Chapter 13 cases endure 36 to 60 months prior to closing procedure).

¹341 Meeting of Creditors - an 11 U.S.C. 341(a) Meeting of Creditors (regarded to as 341 meeting), provides a forum for creditors and interested parties to question the debtor on oath about his finance affairs.

Bankruptcy Fraud

If you have information that a debtor may conceal assets or has not listed them, or has hidden or transferred assets before filing bankruptcy, or you want to report bankruptcy fraud, apply your complaint to the U.S. Trustee.

Detail it in writing and send a letter with a copy to any assigned trustee in your area including:

• Your name

• Your address

• Your contact phone number

• A sharp and brief explanation of the fraud

• Copies of any documents you have concerned with the case

They will investigate the case or pass on to law enforcement authorities.

²341 Meeting of Creditors - an 11 U.S.C. 341(a) Meeting of Creditors (regarded to as 341 meeting), provides a forum for creditors and interested parties to question the debtor on oath about his finance affairs.