Bankruptcy Code

The United States constitution outlined in Article I, Section 8, gave the right of Congress to establish "uniform laws on the subject of bankruptcies." In 1978, the United States Congress enacted the Bankruptcy Code which has been modified and amended since its inception. The United States Federal Bankruptcy Codes are codified in title 11 of the United States Code and governs the administration of the bankruptcy process including the legal procedures and official forms which must be used in all bankruptcy proceedings. The current United States Bankruptcy Code allows several different types of bankruptcies including: Chapter 7 Bankruptcy, Chapter 11 Bankruptcy, Chapter 12 Bankruptcy and Chapter 13 Bankruptcy.

Ninety bankruptcy districts exist across the nation, and there is a Bankruptcy Court for each district. States may have one or more districts. A United States bankruptcy judge is the decision maker for bankruptcy cases and has the authority to decide on the issues associated with the case such as a debtor's right to file a claim or eligibility for discharge of debts. A Trustee is also appointed by the court and has administrative responsibilities which are performed outside the courthouse. The goal of the bankruptcy code is to allow debtors to have the ability to start over after a financial crisis. This goal is accomplished by prohibiting creditors from continuing to collect certain debts which have been discharged by the bankruptcy process. Bankruptcy codes determine what debts can and can not be discharged, the process for creditors to object to discharges, and the steps a debtor can take if a creditor continues to harass them for payment.