bankruptcy Essay -- essays research papers

The original Bankruptcy Act was enacted in 1878. Unlike European countries, American debtors were not punished in any way. Our founders viewed bankruptcy from a antithetic perspective therefore, they included a provision in the U.S. Constitution, which gives Congress the countenance to establish uni plaster bandage bankruptcy laws. The primary purpose of the Bankruptcy work out is to provide debtors an opportunity for a fresh start. In prep argon to have a fresh start the debtor is relieved from reasoned responsibility of past debts. Under the code, debtors be protected against abusive creditor activities. at once a voluntary or involuntary petition is registerd, certain actions by creditors are 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 recover child support or alimony are not suspended.In a situation in which there are both secured and unsecured cr editors, there is a special interest in preventing creditors from obtaining an unfair advantage over other creditors. Unsecured creditors must file a proof of use up this document states the amount of the creditors strike 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...