Your domicile, and sometimes your residence, determines whether you can file bankruptcy, where to file, and what property you keep.
These two requirements are quite straightforward to accomplish, but can trip you up if you don’t take care of them when you need to.
Almost all consumer bankruptcies are voluntary. Involuntary ones are mostly for businesses. Joint cases with your spouse save time and money.
You file bankruptcy most likely under Chapter 7 or 13, or possibly 11. Ch. 12 is for farmers and fisherman, Ch. 9 for governmental entities.
Bankruptcy is a lot easier to understand and much more comfortable to go through when you know who’s who.
One example how debts from a vehicle accident, involving possible drunk driving, are handled in bankruptcy.
If you injured someone by unlawfully driving while intoxicated, the resulting obligation can’t be discharged in bankruptcy.
If you owe an employee wages or benefits, it’s likely a priority debt. Same if you are owed wages or benefits. More likely to be paid.
Income tax debt may be discharged–legally written off–in a Chapter 7 case. It just needs to meet some conditions.
A bankruptcy trustee would pay your “priority” debts ahead of other debts in an “asset case.” But what happens in a “no asset case”?
Here’s what happens to “priority” debts in an “asset case.”
What makes “priority” debts so special?
Here’s a scenario showing how Chapter 13 solves problems that Chapter 7 doesn’t solve in dealing with a creditor’s disputed lien.