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Definition of Bankruptcy
Bankruptcy is a procedure by which a person or an organization can get relief from debts. This procedure is guided under the supervision of federal court.
Common Types of Bankruptcy
The chapter 7 and chapter 13 proceedings are the most common types of individual bankruptcies. The first one is known as straight or liquidation bankruptcy whereas the other type is known as wage earner bankruptcy. There are two more variations of bankruptcy proceedings. One is chapter 11 and the other is chapter 12. The first deals with bankruptcy cases related to a business firm where as the other one deals with family-owned farms. If you are experience financial difficulties, you may want to declare bankruptcy, however, it is not always the solution to the problem.
Bankruptcy has become a trend and more and more people with large debts are filing. Keep in mind that, except in the case of chapter 13, any individual cannot be discharged of his debt if the current bankruptcy case has commenced within 6 years of an earlier filing. It is possible that the trustee related to the proceedings may not believe that your case is genuine. In such a situation, your case may be rejected.
Remember that bankruptcy is issue of great seriousness so consider it carefully. The consequences of these proceedings can set a trend that will follow you throughout your life.
In bankruptcy proceedings, the debtor, the bankruptcy judge, and the creditors all participate. In addition to these individuals, the office of the United States Trustee and the case trustee will also participate in the proceedings. The office of the United States Trustee is a department of justice considered an authority in overseeing bankruptcy cases while the individual trustee participates in proceedings in order to safeguard the interest of the creditors.