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 United States Congress originally put the U.S. bankruptcy laws into place in order to provide a more consistent approach for people considering bankruptcy no matter which state that they may have lived. The philosophy behind the bankruptcy laws is to offer people who are struggling with no hope a vehicle to stop continuing to due financial harm to themselves.

Within the bankruptcy chapters there are four sections or chapters that lay out the various rules, regulations, and qualifications of each type of chapter or statutes. You are probably familiar with the term Chapter 13 bankruptcy or Chapter 7 bankruptcy. These numbers simply refer to the section of the bankruptcy code that addresses the particular circumstance.

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.

Keep in mind however, that even thought the states can't change or amend the basic intent of the core bankruptcy laws, they do have the latitude to interpret how the filings take place and how the laws should be applied.

If you've not considered the dynamic nature of statutes, you would be well advised to. Bankruptcy statutes (just like all statutes)are dynamic in nature. They can and do change at the local (and Federal level)based on the lawmakers either adding amendments to the current statutes or adding completely new sections to the chapters themselves. Because of this it would be a good idea for anyone considering taking the bankruptcy route to consult with the appropriate counsel.

Any type of change to the top level of the bankruptcy codes and statutes will have to come from the United States Congress. On such change has come down the pike as it pertains to the filing of a Chapter 7 bankruptcy. The change to the core statute to this chapter had to do with the burden of proof. Essentially, it added additional criteria (or burden of proof)upon the person filing in order for them to meet the criteria necessary to have the right to file for 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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