Bankruptcy Records: Bankruptcy Types, Crimes, and Why You Should Avoid It

You will never be able to escape a bankruptcy record, even if it happened years ago. Thus, it is prudent to always seek to avoid getting it. Read on and find out why.

The US Bankruptcy Law was designed to:

1. Give an honest person who owes money a new start, so he or she can still live a decent life

2. Give the people or organizations the debtor owes money to a chance to get paid in an orderly fashion

Bankruptcy records can be accessed online through PACER.

Bankruptcy Records: Why to Avoid Filing for Bankruptcy

If you're interested in filing for bankruptcy, the best advice for you is to avoid it at all costs. Bankruptcy is ABSOLUTELY the last resort and shouldn't be filed just because you want to escape paying your debts.

Bankruptcy can wreak havoc on your personal reputation and your financial future. It can seriously jeopardize your career growth or, worse, ruin your chances of even finding a job!

There's also such as thing as strategic bankruptcy, which even as it appears to be the best option, has often backfired. Why? Because bankruptcy basically means that you're legally declaring you're impaired to the point that you can't pay your debts!

If you're thinking that filing for bankruptcy will protect your remaining assets, you may be wrong. US Bankruptcy Law will see to it that your creditors get paid as far as you're able. That means, your remaining assets may have to be liquidated and you'll be forced to live on very little.

Bankruptcy Records: Crimes Associated With Bankruptcy

If you try to hide any assets, you'll be committing a crime and are likely to be prosecuted for bankruptcy fraud. Under US Bankruptcy Law, the following constitute criminal acts:

-Concealing assets

-Conflict of interest

-Filing false claims

-Fee-fixing

-Arrangements for redistributing assets/properties

If you falsify a bankruptcy form, you can be charged and convicted for perjury under US Bankruptcy Law.

Hint: US Bankruptcy Law regarding fraud focuses on the motives and mental state of the filer and the reasons behind particular actions.

Bankruptcy Records: Types of Bankruptcy

The US Bankruptcy Law divides into six chapters. Consumers who owe money usually file under Chapters 7 and 13. Know which type you should file under. Filing under the wrong types of bankruptcy leaves persons and businesses really worse off because it can cost a whole lot more time and money.

Following are three of the most common types.

1. Chapter 7 (Liquidation)

This is the most popular type. Although this is often called Personal Bankruptcy, businesses can use this chapter too. You can only file under this chapter every 6 years. Straightforward bankruptcy filings take around 4 months. This is what happens:

-Most unsecured debts are eliminated.

-Debtors are prevented from further collection.

-Non-exempt assets are liquidated.

-Non-exempt property is turned over to trustee, who then liquidates it

2. Chapter 11 (Rehabilitation/Reorganization)

Usually for businesses that want to reorganize, it's also applicable to individuals. This type is rather complex and so requires an attorney. Most businesses that fall into trouble will file under this chapter. What happens is the debtors:

-Continue with the business

-Still keep asset ownership

-Create reorganization plans so the business can pay creditors

Note: The plan must be finished within 120 days under a new law, unlike before when businesses could take as much time as they pleased.

3. Chapter 13 (Debt Adjustment/Rehab for Persons With Regular Income)

This allows debtors to hang onto their properties, which they could lose, like a house under mortgage or a car. This is what happens:

-Debtors must draw up a plan to pay off what they owe in 3 to 5 years.

-The plan must be submitted for the approval of the bankruptcy court.

-The court appoints a trustee to supervise repayments

Note: If the debtor isn't able to follow the payment plan, the court may convert the bankruptcy to Chapter 7 – in which case the debtor will begin to lose assets.

Other types of bankruptcy are:

Chapter 9 (Municipal Bankruptcy)

Chapter 12 (Family Farmers, Fishermen Rehab) - Like Chapter 13

Chapter 15 (Ancillary/Other International Cases)

RecordsSiteReviews’ has everything you need to know about bankruptcy court records and why it is crucial that you avoid them. Visit its Court Records section.