About Bankruptcy

Bankruptcy originated at least as early as Roman times and today is mostly defined the federal law found in Title 11 of the United States Code.  Under the Supremacy Clause of the US Constitution, Title 11 preempts or supersedes conflicting state laws.  An important part of most bankruptcy filings is the law of exemptions, which are different from from state to state.The purpose of Bankruptcy Law is to provide relief to debtors and fairness among creditors.  Debtors get a “fresh start” and can become productive members of society while creditors are divided into priority classes in which all creditors participate equally with other creditors of the same class.  The automatic stay provides a breathing space for the debtor and avoids a rush by one creditor to grab assets ahead of other creditors. 

Two types or “chapters” of bankruptcy are particularly important to individual debtors today: Chapter 7 and Chapter 13.

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