Bankruptcy

What is Bankruptcy?

Bankruptcy can be defined as a state when an individual or a person is in a poor financial state and is not in a position to pay back his/its debts to his/their creditors. The state of bankruptcyLegal filing with a court of a person's or company's inability to repay debts. Bankruptcy is a LAST RESORT. It kills credit ratings and remains on credit reports for 10 years. Federal student loans, Federal income tax debt and Child support are all exempt from bankruptcy protection laws. .http://www.schoolwork.org/student-credit-cards-3.html can acquire a legal status only when such an impaired financial state is duly recognized by a designated court of law. The process of bankruptcy is initiated by the individual or the organization.

Ancient Origin of the Term Bankruptcy

The word ‘bankruptcy’ originated from the ancient Latin words bancus and ruptus. While bancus means a bench or a table, ruptus means broken. A bank also referred to a bench which was placed by the bankers in the market places or the fairs. These banks or benches contained the details about the bills of exchange and other tolls about the money. Whenever a banker failed to continue his business, he would break the bank to indicate to the public his inability to do the business. Since this practice was very much in vogue in Italy, the broken bench-banco rotto- or bankruptcyThis is a legal proceeding to relieve debt for companies or people who can not pay their debt. Bankruptcy should be last resort considering it stays on your credit report in a negative manner for a full 10 years.http://www.fhamortgagecenter.com/glossary/b.html has its origin in Italy.In ancient Greece, when a father died bankrupt, his descendants and survivors had to pay back the creditors in terms of manual labor. This is to say that the borrower’s descendents had to do manual labor for him for a period of five years. In some cases, the enslavement lasted much longer, even life time

Legal Status of Bankruptcy

With the passage of time, bankruptcyBankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor (involuntary bankruptcy) in an effort to recoup a portion of what they are owed or initiate a restructuring. .http://en.wikipedia.org/wiki/Bankruptcy acquired a legal status and as with every legal issue, it continues to be debated according to the changing social and financial contexts and circumstances. President George Bush signed a bankruptcya process governed by federal law whereby a person may seek relief from payment of debt or to reorganize one's finances. A Chapter 7 bankruptcy case is generally used to discharge unsecured debt. .http://www.coj.net/Departments/Housing%2Band%2BNeighborhoods/Stay%2BHome/Glossary%2Bof%2BTerms.htm law on April 20, 2005,called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The BAPCPA made significant alterations in the existing bankruptcy regime in respect of the Bankruptcy Code and other rules.

Bankruptcy Courts

There is a bankruptcy court in every judicial district. Each state has one or more districts. There are around 90 bankruptcya state of complete lack of some abstract property; spiritual bankruptcy; moral bankruptcy; intellectual bankruptcyhttp://wordnetweb.princeton.edu/perl/webwn?s=bankruptcy districts in the country. Each district court is presided over by a judicial officer or a bankruptcy judge who has the powers to adjudicate all the bankruptcyA person who is insolvent (unable to pay their debts) can be declared bankrupt. This means their assets and income become, for a period, by a trustee who attempts to clear what debts they can..more on Bankruptcyhttp://moneyterms.co.uk/ cases. The judge decides whether or not a particular person or organization can qualify for a bankruptcyA legal determination that an individual or corporation is unable to pay debts. The law allows a period of time in order to pay creditors by reorganizing financial and business affairs under court direction.http://www.goodmoney.com/diction.htm relief or discharge of debts. Most of the bankruptcyA legal process of consumers or businesses seeking federal protection from creditors when the borrower is unable to repay debt obligationshttp://www.nasdaq.com/personal-finance/credit-card-glossary.stm proceedings are of administrative type and are conducted away from the courthouse. According to the new law, the bankruptcy applicants have to use a set of official forms to initiate the legal procedures to resolve their bankruptcy problems.

Bankruptcy Laws

In certain bankruptcyThe state of insolvency of a legal entity that does not have the financial means to pay their incurred debts as they come due. This status is initiated via petition by creditors, or by the bankrupt entity itself.http://www.fastupfront.com/business-finance-glossary.html cases, especially those covered under the chapters 7, 11 or 13, the court appoints a trustee to oversee the process. The debtor’s participation or involvement in the bankruptcyThe legal proceedings by which the affairs of a bankrupt person are turned over to a trustee or receiver for administration under the bankruptcy laws. There are two types of bankruptcy:http://helpwithmybank.org/dictionary/index.html proceedings is generally quite limited. In cases under the chapter 7, the debtor does not appear in the proceedings unless some objections are raised in the case. Under chapter 13, the debtor may appear before the bankruptcy judge only to confirm the plan during the hearings. A debtor is expected to meet the creditors at specially arranged meetings which are held at the offices of the U.S trustees. These meetings are held under the article 341 of the Bankruptcy Code and are usually referred to as 341 meetings. The creditors question the debtors about his property and debts during these meetings.

Objectives of the Bankruptcy Laws

The basic objective behind the bankruptcyLegal process of closing an entity with insufficient assets to cover debts incurred.http://www.prudentialcal.com/Content/Content.aspx?ContentID=579295 suits is to provide the debtor with an opportunity to make a fresh start in his financial endeavors to rebuild a secure and peaceful life free from the threatening telephone calls, mails, court cases and so on. The US Supreme Court made this objective amply clear in a 1934 decision. A bankruptcyA legally declared or recognized condition of insolvency of a person or organizationhttp://en.wiktionary.org/wiki/bankruptcy discharge suit offered an unfortunate yet honest debtor a new opportunity in life and a clear field for future effort so that he could work unhindered by the pressures and discouragement of the contingencies of his existing debt. bankruptcy