Usually the first contact to reach in cases of bankruptcy is an attorney. An attorney can offer you a consultation as to what your options are, in filing for bankruptcy as well as in alternative solutions.
When you decide that bankruptcy is the best solution for you, your claim will be placed under Federal jurisdiction, specifically the United States Bankruptcy Court. Though bankruptcy cases are technically a Federal matter, they are still subject to state law.
The first option in bankruptcy will be which Chapter to pursue: Chapter 7 bankruptcy for basic liquidation, Chapter 9 municipal bankruptcy, Chapter 11 rehabilitation or reorganization, Chapter 12 rehabilitation for farmers and fishermen, Chapter 13 for rehabilitation with a payment plan and Chapter 15 for international bankruptcy cases.
In recent years bankruptcy code has changed thanks to The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This act was put into practice mostly to protect commercial lenders and give more responsibility to debtors to pay back at least a portion of their debt, if their income falls within their state’s median average.
The bankruptcy process is started by filing for your selected chapter and then appearing before a bankruptcy judge to explain your situation. It is a process to protect consumers, but not to avoid responsibility.
