Congress Empowered the Establishment of the Bankruptcy Act

Written by Adam Peck Category: Nursing Homes January 23rd, 2013 2 min read

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 says Los Angeles Bankruptcy Lawyer Steven Peck.

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.

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.