Basic knowledge of bankruptcy law is very important, if you have worked out all the alternatives and have failed to get any better solution, and are finally going ahead to file a court petition for bankruptcy. This is the last thing you can do to save your financial life. In order to make things easier for you to understand, the bankruptcy code has categorized the various bankruptcy laws in various chapters. The main chapters in this regard include chapter 7, chapter 11, chapter 12, chapter 13, and chapter 17. If you are an individual and have trapped yourself in heavy piles of debts, you may like to go for the personal bankruptcy, which is covered under the chapter 7 and chapter 11. In addition to personal bankruptcy, the chapter 7 bankruptcy is also used by the business corporations.
One of the most important things that you must be thoroughly aware of is that the bankruptcy laws change from state to state. However, it also does not mean that every state has a different bankruptcy code. Bankruptcy code is same, but the only difference lies in the way they are interpreted in various states. Therefore, while you are shopping around to choose the best bankruptcy attorney for you, you will have to make sure that the bankruptcy lawyer you chose is thoroughly aware with way the bankruptcy laws have been interpreted in particular states. One simple example of the variation of the bankruptcy laws in various states is that some states will allows the debtor to keep their homes even under chapter 7, while under the same chapter of bankruptcy code, in other states, all the assets including the home owned by the debtor is liquidated in order to settle the creditors’ claims with the money collected. In addition, you should also note that not all the bankruptcy laws are different. Most of them are federally mandated without exception.
In chapter of the bankruptcy laws, in the bankruptcy code, as defined by the federal court has different set of laws related to bankruptcy. Some chapters allow the individuals and the companies to continue with their business operations while other chapters force liquidation of the assets to pay off the debts. If you are aware of the various bankruptcy laws, specific to your particular state, it will make things much easier for you during the bankruptcy proceedings in the bankruptcy court.