Selecting the Best Chapter Bankruptcy Options
With each chapter, bankruptcy law permits a wide assortment of options. The Code specifically allows debtors to choose the preferred chapter, and frequently, among provisions for relief within each chapter. In large part, these choices allow debtors to maximize benefits received, subject to review for legal compliance. In one sense, debtors are allowed to custom build their own case subject to limitations provided by law.
Within the limitations of each chapter, bankruptcy options provide many opportunities for debtors before filing. This practice is known as pre-bankruptcy planning. For instance, the intentional wasting of assets before filing is strictly forbidden, yet payments to creditors are not required to be equal. In effect, debtors may pay current important debts while debts scheduled to be discharged remain in arrears. Also, the Code sets forth various look-back periods before a case is filed, to review the conversion of non-exempt assets into assets that may later be claimed as exempt.
Bankruptcy Courts Review Selections
When considering either chapter, bankruptcy courts retain broad authority to either grant or deny relief requested. Objections may be filed by the Court upon it's own motion, the Trustee, Creditors, or any party in interest. If an objection is filed, the debtor and their attorney must receive written notice and are afforded an opportunity to respond. If the motion is meritorious and legitimately contested, Courts usually allow each party to present oral arguments during a hearing before rendering a decision.
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