Chapter 7 Bankruptcy Laws
The primary source of Chapter 7 bankruptcy laws appears in Title 11 of the United States Code. Within Title 11, Four chapters provide sections that specifically regulate Chapter 7 liquidation procedures. In the first chapter , sections pertain primarily to definitions of legal terms, the rules of construction used by the court, and the powers of the court. Additionally. the first chapter specifically includes:
- a clause pertaining to the waiver of sovereign immunity
- terms of access to free bankruptcy records applicable to the public
- the requirements for being a debtor in Chapter 7 liquidation cases
- fines and penalties applicable for fraudulently preparation of schedules, documents and forms
The second chapter pertains primarily to how to file Chapter 7, the powers of the court and administrative orders, and procedures for trustees and officers during the administration of cases. The third chapter provides statutory requirements for disclosing information, the relationship between creditors and claims, and the debtors duties and benefits when exempting portions of the estate. The fourth chapter within Title 11 that deals exclusively with Chapter 7 cases provides:
- Liquidation procedures through the final discharge hearing
- Qualifications for trustees in Chapter 7 cases
- Procedures for the collection, liquidation and distribution of assets of the estate
- Special provisions which apply only to stock brokers, commodity brokers, and clearing banks
Chapter 7 Bankruptcy Law Rules
In addition to the Code, an extensive set of rules also apply. Chapter 7 bankruptcy laws must include consideration of the Federal Rules of Evidence (which apply in all Federal cases), the Federal Rules of Civil Procedure (applicable in all Federal cases), the Federal Rules of Bankruptcy Procedures, and Local Bankruptcy rules. There are two types of Local Rules: those created nationally and apply to all courts, and localized rules created by Districts, divisions, and even specific judges for application in one courtroom.
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