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Bankruptcy Law Information

Bankruptcy law is the group of laws set out in Title 11 of the United States Code of Laws.

You file bankruptcy by filing paperwork called a bankruptcy petition and schedules with the bankruptcy court in the correct district, which is normally in the state where you live. When you file a bankruptcy you are called a Debtor. In the paperwork you tell the bankruptcy court about all of the people you owe (your creditors) and about all of the things you own (your assets). You tell the bankruptcy court about your budget (your monthly income and your monthly expenses).

There are lots of other questions that you have to answer and they are designed to give anyone reading all of the paperwork a clear snapshot of your financial picture. Everything you say has to be complete and is said under penalty of perjury, which makes it a crime not to tell the complete truth. You also have to attach certain documents to the paperwork and provide other information to the court which helps prove what you said in your paperwork. In most districts the paperwork is filed electronically over the internet by the lawyer filing it.

When you file bankruptcy a thing called the automatic stay protects you. The stay is like a legal force field around you and most creditors cannot penetrate it after you file bankruptcy unless (a) they get the bankruptcy court’s permission or (b) the bankruptcy law specifically says that the automatic stay does not apply to them. This means that those affected creditors cannot contact you, sue you, repossess your car, foreclose on your house, file a lien, etc against you.

Usually within about 30 days after you file bankruptcy there is a bankruptcy hearing which you and your attorney must attend. Where it is depends on where you live. In South Carolina, you either go to court in Charleston, Columbia or Spartanburg. This hearing is called the Meeting of Creditors, but it is really the debtor’s hearing. The creditors are invited to attend but usually don’t, although business creditors, ex-spouses and generally ornery people usually attend.

The hearings are tape recorded and the debtor testifies concerning his assets and liabilities and answers any questions he is asked under penalty of perjury.

  • Learn More About Bankruptcy

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  • Can I go to Jail for not Paying my Bills?

    No, not unless you committed a crime in the creation of the debt (for example, fraud). Simply borrowing money and not being able to pay it back is not a crime. Many creditors representatives will tell you lies on the telephone and say that they will have you put in jail. Perhaps they are too ignorant to know they are wrong or that it is illegal for them even to say that. See More Bankruptcy Q&A