Bankruptcy cases may be filed under various chapters of the United States Bankruptcy Code. The most common are as follows:

• Chapter 7

  Chapter 7 is a part of the Bankruptcy Code that deals with liquidation. Individuals, corporations, etc. may file a Chapter 7. However, only an individual Chapter 7 debtor qualifies for a discharge.   More info...

• Chapter 11

  Chapter 11 is part of the Bankruptcy Code that deals with reorganization. Chapter 11 cases are typically used by businesses. However, an individual who wishes to reorganize, but who does not qualify for a Chapter 13, can file an 11.  

• Chapter 13

  Chapter 13 is part of the Bankruptcy Code that deals with the adjustment of debts of an individual with regular income.   More info...

Whether you file a Chapter 7 or a 13, the following information applies:

Filing Bankruptcy

A bankruptcy case begins by filing a petition with the bankruptcy court in the district where the individual debtor lives or where the business debtor has its principal place of business or where its principal assets are located. A husband and wife may file a joint petition, or a spouse may file individually. Joint petitioners pay only one filing fee.

Debtors are also required to file schedules listing all of their assets and liabilities, including current income and expenses, and a statement of financial affairs. If a debtor fails to list a debt, he or she may be precluded from obtaining a discharge.

At the time a debtor files his or her petition, a filing fee must be paid to the Bankruptcy Court. The current filing fees are as follows:

Chapter 7       $299.00

Chapter 11     $1,039.00

Chapter 13     $274.00

Automatic Stay

Filing a petition "automatically stays" most creditor actions against the debtor and the debtor's property. This stay arises by operation of law and requires no judicial action. While the stay is in effect, creditors cannot initiate or continue lawsuits, repossessions, or wage garnishments.

Discharge

One of the reasons people file bankruptcy is to get a "discharge" which is a court order stating that you do not have to pay your debts. A discharge only applies to debts incurred prior to the date the bankruptcy case is filed.

Some debts cannot be discharged. For example, you cannot discharge debts for:

• Most taxes,
• Child support,
• Alimony,
• Most student loans,
• Court imposed fines and criminal restitution orders, or
• Personal injury claims caused by driving drunk or under the influence of drugs.

In addition, debts incurred by fraud may not be discharged.

Appointment of a Trustee

In cases filed under either Chapter 7 or Chapter 13, the Office of the United States Trustee appoints an impartial trustee to administer the case. The actual role of the respective trustees is discussed below.

Meeting of Creditors

Within approximately 30 days after the bankruptcy case is filed, the trustee in the case conducts a meeting of creditors. Debtors are required to: (1) attend the creditors meeting; (2) cooperate with the trustee; and (3) provide the trustee with any financial records or documents requested. Husbands and wives filing jointly must both attend the meetings.

The purpose of these meetings is for the trustee to examine the debtor to ensure that the debtor's bankruptcy schedules and statements are accurate and that the debtor understands the consequences of obligations associated with filing bankruptcy. Although creditors may appear at the meeting and examine the debtor about the nature and extent of any assets, creditors seldom attend the creditor meetings.