Bankruptcy Laws And How They Change

Heading toward bankruptcy is usually something that most people don't even consider having happen in their lifetime. But statistics today prove differently. The reality of bankruptcy today is that there are increasing numbers of people that are entering the bankruptcy system. The different chapters of bankruptcy (chapter 7, chapter 11, chapter 13) are becoming more and more prevalent today.

The U.S. bankruptcy laws were put in place by Congress in order to provide uniformity to the code and statutes throughout the United States. The bankruptcy laws were actually put in place to protect people from doing further financial harm.

At the time of this writing there are currently four different chapters to the bankruptcy code. For example, you may be familiar with the bankruptcy term Chapter 7 bankruptcy. The chapter 7 part is the section of code or the statutes that address the rules and regulations of Chapter 7 bankruptcy.

Each of the various bankruptcy chapters have their own unique set of rules, regulations, and statutes as they pertain to the filing procedures, how the debt is ultimately relieved, and how the creditors are affected and what their rights are in the procedure or chapter.

The individual states can have and pass their own statutes concerning bankruptcy laws or codes. However, any statue that a state may be considering for law must still work within the framework of the Federal bankruptcy codes.

So, even though the individual states cannot change the intent of the Federal bankruptcy laws, each state can however, interpret how the claims must be filed and how the claims are acted upon.

As is the case with statutes, they tend to be somewhat dynamic; meaning they change with additions and deletions to the code over time as amendments are ratified through the body of lawmakers. Because of this dynamic, it is a very good idea for an individual considering bankruptcy as an option to seek the counsel of an attorney who deals in the area of bankruptcy code.

If there is a change to the core bankruptcy laws of the country, it will come from the congress of the United States. For instance, one such change that effected the rules for the filing of chapter 7 bankruptcy. The change to this particular section of the bankruptcy code adds some burden of proof on the part of the filer that they do indeed have met the criteria for the right to file such bankruptcy.

In such a case, the debtor will only be allowed to file if they have fulfilled a financial and bankruptcy counseling session. The intent of such an addendum to the statutes is to help ensure that the bankruptcy relief statutes are not being taken advantage of by individuals who just don't want to pay their debt.

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