{"id":143,"date":"2018-11-27T19:58:38","date_gmt":"2018-11-27T19:58:38","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/suny-monroe-law101\/?post_type=chapter&p=143"},"modified":"2022-06-28T15:13:23","modified_gmt":"2022-06-28T15:13:23","slug":"bankruptcy","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/suny-monroe-law101\/chapter\/bankruptcy\/","title":{"raw":"BANKRUPTCY","rendered":"BANKRUPTCY"},"content":{"raw":"
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There are occasions when individuals (and companies) find themselves in so much debt, they can no longer pay their bills and function financially. This is where bankruptcy can assist a person by relieving them of their debt burden and giving them a fresh start. The first thing to understand about bankruptcy is that is federal legal action. There is no New York State law allowing for bankruptcy. Our Founders realized that too much debt can become a problem and set forth in the U.S. Constitution as a remedy.<\/p>\r\n\r\n

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\u201cThe Congress shall have Power To...establish...uniform Laws on the subject of Bankruptcies throughout the United States....\u201d ARTICLE I, SECTION 8, CLAUSE 4<\/span><\/p>\r\n<\/blockquote>\r\n

Personal bankruptcies are covered primarily under two parts of the U.S. Bankruptcy Code, Chapter 7\u2019s and Chapter 13\u2019s.<\/p>\r\n

Chapter 7 Bankruptcy: <\/strong>Chapter 7 liquidation, commonly referred to as straight bankruptcy, is often what people mean or think of when they use or hear the term generically. In its simplest form, Chapter 7 wipes out most, but not all of your debts and, in return, you may have to surrender some of your property. Chapter 7 doesn\u2019t include a repayment plan. Your debts are simply eliminated forever.<\/p>\r\n

To qualify for a Chapter 7 bankruptcy, you must first pass the means test. If you have too many means, i.e. income or money, you can\u2019t declare Chapter 7 bankruptcy. Second, you must receive required credit counseling. At some point during the six months before you file for bankruptcy, you have to receive counseling and get a certificate from a court-approved nonprofit credit counselor.<\/p>\r\n

Some debts cannot be discharged and will still be owed by the debtor even after the bankruptcy. Some assets are allowed to be kept by the debtor (exemptions) like a home allowance, a motor vehicle, and personal property up to certain amounts.<\/p>\r\n

Some of the non-dischargeable debts are:<\/p>\r\n\r\n