Posted by: Lindsey Connell
There are 94 financial judicial districts and they all handle bankruptcy matters, seeing how bankruptcy cases cannot be filed in state court. Bankruptcy laws are meant to give those in extreme debt a second chance by liquidating their assets or creating a plan for the person to repay their debt. These laws not only protect individuals, but also large companies as seen in today’s society with many companies choosing to go bankrupt due to the bad economy. In the past, bankruptcy laws were only temporary and were lifted when the economy was booming but today, these laws are set in stone. As of 2001, laws are in the works to make it more difficult to file for Ch 7 bankruptcy (complete dismissal) which would force people to create a repayment plan as stated in Ch 13. The Ch 7 laws deal with liquidation and are the most common type of bankruptcy filing because it liquidates a debtor’s assets and repays this way. Ch 11, 12, and 13 deal with rehabilitation and through this, the debtor’s future earnings are used to pay back creditors. People tend to choose to file for Ch 7 because it allows them to be out of debt quickly whereas with the rehabilitation route, they must pay back with their income over a longer period of time.
With 94 different financial courts spread out throughout the country, doesn't that leave room for some discrepancy among the rulings? A ruling for a chapter 7 versus a chapter 11 is somewhat objective depending on which court the case is presented to.
ReplyDelete-Andrew Pia
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