The bankruptcy petition (Official Form 1), includes fields for your debtors name, address, social security number, as well as any aliases your debtor has had, and what type of case they are filing – chapter 7, chapter 13, chapter 11, business bankruptcy, consumer bankruptcy and what their marital status is at the time of their bankruptcy filing.
The bankruptcy petition also includes a summary of your bankruptcy to inform the court quickly as to what the assets and debts are in this particular bankruptcy.
Lastly, the bankruptcy petition lists your bankruptcy attorney's name, address, firm, and requires both the attorney's and debtor(s) signatures. This is to confirm that what you list in the bankruptcy schedules is true to your knowledge.
There are two types of Bankruptcy Petitions - Voluntary (Official Form 1) and Involuntary (Official Form 5). We will discuss both types of petitions in this segment.
The voluntary petition is completed by the attorney with the information gathered from the debtor. The information collected for the Voluntary petition includes debtors name, address, social security number (redacted), as well as any aliases your debtor has had (in the last 8 years), and what type of case they are filing - Chapter 7, Chapter 13, Chapter 11, business bankruptcy, consumer bankruptcy and what their marital status is at the time of their bankruptcy filing.
A business bankruptcy is when the debtor is a business, corporation or partnership. A consumer bankruptcy is when the debtor is an individual, or has primarily consumer debts.
What is the difference between the types of bankruptcy chapters? Well, a Chapter 7 bankruptcy case is when and individual debtor (not corporation or partnership) is plans to allow for liquidation of all assets (that aren't exempt by the state the bankruptcy is being filed in). The bankruptcy trustee then uses the funds from the liquidation to pay creditors that the debtor owes. Attorneys must discuss with debtors the fact that they may lose property (that is not exempt), when they file a Chapter 7 bankruptcy. However, all debt (aside from IRS debt or student loan debt) will be discharged, and the debtor is no longer responsible to pay back the debts. The creditors are not allowed to attempt recovery of the debt once the Voluntary Petition for a Chapter 7 bankruptcy is filed.
A Chapter 9 Bankruptcy is an uncommon (less than 500 chapter 9 cases filed since it's enactment in 1937) chapter in bankruptcy, and that is a bankruptcy for towns, school districts, cities, and other public agency. Chapter 9 is a plan to put the collections on hold for the agency to reorganize and renegotiate a plan to pay back their debts.
Chapter 11 Bankruptcy is a more common chapter to file - as it is similar to a Chapter 9, however, pertains mainly to corporations, and businesses as the debtor (vs. municipalities in a Chapter 9). However, individuals may file for Chapter 11 relief, if they meet certain bankruptcy code eligibility. A Chapter 11 case is often referred to as a "reorganization" for businesses and corporations. The bankruptcy trustee acts as an intermediary figure for the funds to be transferred from the corporation or business to the creditors in an order that is determined in bankruptcy court. There are some companies and law firms that strictly handle Chapter 11 cases because of their specificity, and amounts that can be involved when large companies must file for Chapter 11 relief.
A Chapter 13 Bankruptcy, on the other hand, is a plan to pay back creditors based on your monthly income and expenses. Chapter 13 cases are more difficult and involve a lot of planning and organizing, therefore, a Chapter 13 bankruptcy will cost more to prepare and to file. A Chapter 13 plan will be implemented by the Chapter 13 trustee for your court district. The trustee is an attorney who has now moved into doing trustee work. The trustee is familiar and specializes in implementing plans for the court and creditors. A Chapter 13 plan has a life of no more than 5 years, which means the debtor will be paying back creditors for up to 5 years (may be less, but cannot be more). Usually debtors enter into a Chapter 13 when they have more income than expenses and/or are over the Current Monthly Income amount for their state.
There are also bankruptcy Chapters 12 and Chapter 15, however they are very unusual, but possible to complete with your Bankruptcy2015™ software.
Another aspect of the Bankruptcy Petition is alerting the trustee to whether or not assets are available for distribution. This is a summary of the debtors liabilities (debts), and assets. In a Chapter 7 filing, there are no assets available (for creditors), however, in a Chapter 13 case, it will show that there are assets available for distribution (through your Chapter 13 plan) to creditors. This gives the trustee a quick look at what kind of case s/he has been assigned and how to proceed.
The Involuntary Bankruptcy Petition is when a creditor or group of creditors may force a debtor into bankruptcy if they are not being paid back. This is a much shorter (2 page) petition that the attorney for the petitioners will complete and file.
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