Bankruptcy Court Essentials
Essentially, bankruptcy cases can be voluntary or involuntary. The general majority of cases will be voluntary. In these cases, debtors (the people who owe money) petition the bankruptcy court. In the case of involuntary bankruptcy creditors (the people who you money to) file the petition in bankruptcy. Involuntary petitions are generally rare and are sometimes utilized in business settings in order to force a company into bankruptcy so the creditors can enforce their rights.
The beginning of a bankruptcy case begins with an estate. This is what the creditors scope out to see if there is anything they want. The estate is made up of all of the debtor’s property interests at the time of the commencement. Not all property will be up for grabs. Some of it is subject to certain exclusions and exemptions.
If you are married, the estate might include particular community property interests of your wife or husband, even if your wife or husband has not filed bankruptcy. The estate might contain additional items including property acquired by will or inheritance within one hundred and eighty days after the the commencement of the case.
For the purpose of federal income taxes, the bankruptcy estate of someone in a Chapter 7 or 11 case is a separate taxable entity from the debtor. The bankruptcy estate of a corporation, partnership or other collective entity or estates of individuals filing for Chapters 12 or 13 is not a separate taxable entity.
In each judicial district, bankruptcy judges comprise a unit of the United States District Court. The judge will be appointed for a term of fourteen years by the United States Court Of Appeals. The District Courts have subject matter jurisdiction over bankruptcy matters. But each district may refer bankruptcy matters to the Bankruptcy Court. Most district courts have an order so that all bankruptcy cases are handles by the Bankruptcy Court.
Mallory McGuinness works for a debt collection company. Also she writes stories about finance and business, consumer spending and collection agencies. You are welcome to reprint this article – but get your own unique content version here.
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