Bankruptcy is a federal court procedure that helps you to address your debts under the supervision of a trustee appointed by the court. You can repay your debts either by selling your assets or making payments according to a repayment plan. The most common types of bankruptcy filed by consumers include Chapter 7 and Chapter 13 bankruptcy. Chapter 11 is not uncommon though. Bankruptcy laws also help business houses facing financial stalemate.
There are 94 federal judicial districts that handle matters related to bankruptcy. And bankruptcy cases are filed in almost all districts in the bankruptcy courts. Bankruptcy cases cannot be filed in state courts.
New federal bankruptcy laws were introduced in 2005 to reduce debtors from filing bankruptcy. The new bankruptcy laws have made it compulsory to undergo a credit counseling session before you file bankruptcy.
The individuals providing debtor education as well as credit counseling to consumers intending to file bankruptcy are approved by the U.S. trustee in majority of the states. The bankruptcy administrators are responsible for approving the individuals offering the “special pre-bankruptcy briefing” in 6 districts located in North Carolina and Alabama. A list of debtor education as well as credit counseling providers is maintained by the bankruptcy administrators and the United States trustee.