Bankruptcy Form

     Bankruptcy form refers to the different kinds of bankruptcy that persons or businesses can file.  Bankruptcy is a legal process whereby persons and businesses can obtain debt relief subject to the provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, and earlier acts.  The different types of bankruptcy form, or chapters, depend on the different situations.  

     All bankruptcy filings begin with a session with a credit counselor, a requirement of the 2005 law.  The agency must be approved by the United State Trustee's office in order to be acceptable to the bankruptcy court.  The agency counsels and evaluates the potential filer to see if it is possible to avoid a bankruptcy filing with financial management assistance.  If not, they determine whether the individual is a candidate for a Chapter 7 bankruptcy filing by determining the six month average figure and comparing it to the median income in the area where the individual resides.  If the debtor's income exceeds the median, he cannot file under Chapter 7 bankruptcy.  If his income is less than the median, then disposable income is calculated.  Allowable expenses, as determined by IRS standards, are deducted from the income figure, and if less than $100, then the debtor can file under Chapter 7 bankruptcy.

Types of Bankruptcy Form  

     Most personal bankruptcies are either Chapter 7 bankruptcy or Chapter 13  bankruptcy form.  A Chapter 7 bankruptcy, or straight bankruptcy filing, results in liquidation of non-exempt assets. Assets are classified as exempt or non-exempt depending on the rules in the state, if the filer as been a resident for two years or longer.  If not, they use the state where he used to live or the federal rules.  Non-exempt assets, valued at retail replacement value, are liquidated by a trustee of the bankruptcy court and the proceeds used to pay creditors.  After the completion of financial management classes, the bankruptcy court will order any remaining unsecured debts discharged.  The filer carries the bankruptcy on his credit record for ten years, but can start re-establishing credit, especially a post bankruptcy home loan,  immediately following the end of the proceedings.  An individual can file under Chapter 7 bankruptcy once every six years.

     A Chapter 13 bankruptcy filing results in the debt structure being renegotiated and a payment schedule over a three to five year period being worked out.  The debts are restructures and paid.  This process is longer than the three to four months of a Chapter 7 bankruptcy filing.

     A Chapter 11 bankruptcy reorganization is usually used as a bankruptcy form for businesses.

2005 Law and Bankruptcy Form

     The 2005 bankruptcy law changed a lot of the ground rules.  Some individuals have income levels too high to allow for a Chapter 7 bankruptcy filing and have to file under Chapter 13 bankruptcy.   Rules on asset valuation mean more assets are non-exempt in Chapter 7 bankruptcy cases.  The definitions of income and expenses mean that many Chapter 13 bankruptcy filers find a larger chunk of their income being used by the trustee to cover their debts.  And legal fees have increased since bankruptcy lawyers must now personally vouch for the accuracy of the information presented. You should seek professional advice as to the law and bankruptcy forms.