Bankruptcy is enabled by the United States Constitution, but its implementation is by statute. The relevant statutes are incorporated within the Bankruptcy Code, located at Title 11 of the United States Code, and amplified by state law in the many places where Federal law either fails to speak or defers expressly to state law.
While Bankruptcy actions in the U.S. occur first in United States Bankruptcy Court (an inferior court to the U.S. District Courts), bankruptcy cases are highly dependant upon State law. State law therefore plays a major role in many Bankruptcy cases, and it is often quite unwise to generalize Bankruptcy issues across state lines.
As of 2005, significant changes to the Code, mostly for the benefit of creditors, are imminent.
History
The extent Bankruptcy Code replaced the old Bankruptcy Act of 1895 in the late 1970s.
Federal bankruptcy law provides that an individual debtor footnote 2can protect some property from the claims of creditors either because it is exempt under federal bankruptcy law or because it is exempt under the laws of the debtor's home state.
The BankruptcyCode requires that reaffirmation agreements contain an explicit statement advising the debtor that the agreement is not required by bankruptcy or non- bankruptcy law.
United States trustees and bankruptcy administrators are responsible for establishing a panel of private trustees to serve as trustee in chapter 7 cases and for supervising the administration of cases and trustees under chapters 7, 11, 12, and 13 of the BankruptcyCode.
Bankruptcy law provides for the development of a plan that allows a debtor, who is unable to pay his creditors, to resolve his debts through the division of his assets among his creditors.
Bankruptcy proceedings are supervised by and litigated in the United States Bankruptcy Courts (http://www.uscourts.gov/bankruptcycourts.html).
Bankruptcy proceedings under Chapters 11, 12, and 13 involve the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors.
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