Bankruptcy is a legal process to ensure the satisfaction of debt and the ability of entities to continue their livelihood. There are four main sides to any bankruptcy case: debtor(s), creditor(s), trustee, and the court. Each side adds an equivalent part to bring on a whole speedy process to the case.  Click on the informative Understanding Bankruptcy graph below for an explanation of terms.

CREDITOR:
Definition
Garnishment
Liens
Mortgages
DEBTOR:
Definition
Rights and Duties
Protection
TRUSTEE:
Definition
Bankruptcy Trustee
Qualifications
Duties
THE COURT:
Definition
Official Forms
Bankruptcy Types

Debtor Protection

 

Coverage granted through statutes offering limitation of liability through a higher neutral side.

Both state and federal laws offer debtors various protection options.

Exemptions:

Real Property

 

Using homestead exemption, each state allows debtors to shield a portion of their primary residence value. This exempted amount is considered free from claims of unsecured creditors or trustees in bankruptcy. Some states will only provide homestead exemption if the debtor has a family.

 

Personal Property

 

Varies depending on the state where the debtor resides and the type of debt incurred. Here is a list of common personal property that is usually exempted:

  1. Clothing and personal family oriented possessions (such as family pictures and videos)
  2. Business equipment used by the debtor during work hours (includes school books and material used for education)
  3. Certain animals (such as pets)
  4. Furniture up to a certain dollar amount


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Government Bankruptcy Resources


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What Documents Do I Need To File For Bankruptcy?


We want your bankruptcy to go as smoothly as possible. See what documents you should have prepared.  Read more