bankruptcy Essay -- essays research papers

The original nonstarter Act was enacted in 1878. Unlike European countries, American debtors were not punished in any way. Our founders viewed loser from a different perspective in that respectfore, they included a provision in the U.S. Constitution, which gives Congress the authority to establish uniform failure laws. The primary purpose of the Bankruptcy Code is to provide debtors an opportunity for a fresh start. In order to have a fresh start the debtor is relieved from level-headed responsibility of past debts. Under the code, debtors be protected against abusive creditor activities. Once a voluntary or involuntary petition is filed, certain actions by creditors atomic number 18 suspended under automatic stay. Both secured and unsecured creditors are suspended from taking any action against the debtor or the debtors property. However, actions to reanimate child support or alimony are not suspended.In a situation in which there are both secured and unsecured creditors, th ere is a special interest in preventing creditors from obtaining an unfair advantage over other creditors. Unsecured creditors must file a proof of claim this enter states the amount of the creditors claim against the debtor. Secured creditors are not required to file a proof of claim unless the amount of claim exceeds the value of the collateral. Voidable transfers are another form of protection between creditors. Preferential transfers or liens made to a creditor by the debtor within 90 days before bankruptcy can...