The purpose of this article is to provide general information about bankruptcy to consumers, and the author encourages consumers to meet with a bankruptcy attorney for more specific information.
Congress has been given power under the Constitution to establish the Bankruptcy Code. As such, bankruptcy law is federal law. Congress allows for five types of bankruptcy, Chapter 7, Chapter 9, Chapter 11, Chapter 12, and Chapter 13. Each type of bankruptcy has its own purpose and guidelines: a Chapter 7 is used by individuals (consumers) and is referred to as a “liquidation” because they must sell off any thing of value to pay off creditors; a Chapter 9 is used by insolvent municipalities to adjust for debt; a Chapter 11 is used by business owners, and the court and creditors must approve the payment plan to repay the creditors; a Chapter 12 is similar to Chapter 13, but is used by family fishermen and farmers; and a Chapter 13 is used by consumers and businesses who want to keep their assets and are placed on a payment plan to repay their creditors.
Although a consumer client may choose a Chapter 7, he or she may not qualify. Ultimately, the bankruptcy trustee appointed by the court will decide which bankruptcy filing is appropriate according to the Bankruptcy Code. The bankruptcy trustee makes this determination based, in part, upon documentation the consumer provides the court. Attorneys often want to review several items before filing with the US Bankruptcy Court. The article provides a list of items that a Utah bankruptcy lawyer may require, but bankruptcy lawyers may require more or less items based on their practice.
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