Bankruptcy Information Sheet printable pdf download

BANKRUPTCY INFORMATION SHEET

BANKRUPTCY LAW IS A FEDERAL LAW.

THIS SHEET PROVIDES YOU WITH GENERAL

INFORMATION ABOUT WHAT HAPPENS IN A BANKRUPTCY CASE. THE INFORMATION HERE IS

NOT COMPLETE. YOU MAY NEED LEGAL ADVICE.

WHEN YOU FILE BANKRUPTCY

You can choose the kind of bankruptcy that best meets your needs (provided you meet certain

qualifications):

Chapter 7 – A trustee is appointed to take over your property. Any property of value will be

sold or turned into money to pay your creditors. You may be able to keep some personal

items and possibly real estate depending on the law of the State where you live and

applicable federal laws.

Chapter 13 – You can usually keep your property, but you must earn wages or have some

other source of regular income and you must agree to pay part of your income to your

creditors. The court must approve your repayment plan and your budget. A trustee is

appointed and will collect the payments from you, pay your creditors, and make sure you live

up to the terms of your repayment plan.

Chapter 12 – Like chapter 13, but it is only for family farmers and family fishermen.

Chapter 11 – This is used mostly by businesses. In chapter 11, you may continue to operate

your business, but your creditors and the court must approve a plan to repay your debts.

There is no trustee unless the judge decides that one is necessary; if a trustee is appointed,

the trustee takes control of your business and property.

If you have already filed bankruptcy under chapter 7, you may be able to change your case to another

chapter.

Your bankruptcy may be reported on your credit record for as long as ten years. It can affect your ability to

receive credit in the future.

WHAT IS A BANKRUPTCY DISCHARGE AND HOW DOES IT OPERATE?

One of the reasons people file bankruptcy is to get a “discharge.” A discharge is a court order which states

that you do not have to pay most of your debts. Some debts cannot be discharged. For example, you

cannot discharge debts for–

•

most taxes;

•

child support;

•

alimony;

•

most student loans;

•

court fines and criminal restitution; and

•

personal injury caused by driving drunk or under the influence of drugs.

~ Over ~

Revised 10/05

Bankruptcy Information Sheet