Posted On:
September 13, 2009
What is "bankruptcy"?
Bankruptcy is a legal proceeding governed by federal law, found in Title 11 of the U.S. Code. Those who are unable to pay their bills can use it, if they qualify, to obtain a "fresh start" or to move forward in life without certain types of debt.
The Bankruptcy formally begins with the filing of a bankruptcy "petition and schedules" with the U.S. Bankruptcy Court. A stay against collection is issued upon the filing i.e. creditors have to cease activity, and the filer must disclose his or her financial life in detail to the court.
Bankruptcy law "trumps" conflicting state law as a result of the Supremacy Clause of the Constitution, except for property exemption issues which vary from state to state.
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