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 The concept of a bankruptcy system (English: bankruptcy ) refers to the legal procedure that involves a person, company, or institution that is unable to pay the debts owed by it, as the bankruptcy process begins with the submission of a list by the debtor, the most common cause, or on behalf of a group of creditors, which is The less common case, and all the assets of the debtor are measured and evaluated, and where the assets can be used to pay off part of the debts owed by that person or institution, noting that there are different types of bankruptcy, usually referred to in their separation in many laws, and this varies depending on or according to The law of each country

What is the bankruptcy system?

The bankruptcy system provides the individual or the business with a good opportunity to start over again, by exempting debts that the person or institution cannot pay within a short period, by providing an opportunity for creditors to obtain some amount of payment, based on the individual’s assets or the business available for liquidation, In theory, the benefit of this lies in the ability to file for macroeconomic bankruptcy, by giving people and companies a second chance to access consumer credit, by providing creditors with a certain amount of commitment and repayment, and upon completion of all the steps that bring the institution out of bankruptcy After all the bankruptcy proceedings have been carried out, the debtor is released from the debt obligations incurred prior to filing this system, knowing that since the bankruptcy system is a very powerful remedy, it is only offered to honest debtors of high confidence and exceptional circumstances, who disclose all their property and debts (1) .

Advantages of bankruptcy

Many advantages and advantages result from bankruptcy law, including that the declaration of bankruptcy helps relieve complex legal obligations, which entail paying debts, and placing the hands of banks on the property, including companies, homes, and real estate, depending on the type of bankruptcy application. that the person has applied for, but can also lower the credit rating, making it more difficult to get another loan, mortgage, or credit card with a lower or lower rate, and prevent the purchase of a house, apartment, or any new business or business In the future, it also offers competition with fewer risks and threats (1).

A person is also allowed to keep a good or sufficient amount of his income, to invest in it later, so that if a person has the responsibility to make payments from his monthly or personal income, it can be for a period of up to three years only, and does not exceed this period, and will not The bankruptcy owner is obliged to pay his payments if his only source of income is from the allowances or social welfare, for example, and creditors must also stop all forms and types of judicial procedures, to recover their money after the execution of the bankruptcy order, and therefore the person will not have to pay the debts covered bankruptcy thereafter (4).

The mechanism for dealing with bankruptcy cases

We will focus in this paragraph on the mechanism by which the bankruptcy system is dealt with, specifically in the United States of America, by the American federal system, which has established a set of well-studied and established laws for this type of economic dealing, and the most prominent of these laws are that: Bankruptcy cases in federal courts, as mentioned earlier, according to a set of rules specified in the approved US bankruptcy law, and there are different types of bankruptcy cases, which are usually referred to in their chapter in the American bankruptcy law, namely (2) :

That individual may file Chapter 7 or Chapter 13 bankruptcy, depending on their status or status, and municipalities — cities, towns, villages, tax counties, municipal utilities, and school districts — may file under Chapter 9 for reorganization.

Corporations may file for Chapter 7 bankruptcy for liquidation or Chapter 11 for reorganization.

Chapter 12 can provide debt relief for family farmers and fishermen.

Bankruptcy files involving parties from more than one country are filed under Chapter 15.

Bankruptcy Basics may provide detailed information about the filing.

It is also noted that there is a set of recommendations that strongly emphasize seeking advice from specialists, i.e. lawyers and legal advisors, as a qualified person must be resorted to, because bankruptcy has many risks and long-term financial and legal consequences, noting that there are some individuals who They file their bankruptcy cases without a lawyer or legal person, which in this case is called an individual filing.

Bankruptcy Courts

Bankruptcy courts are a group of sub-units of the federal-local court system. As a result, there is a bankruptcy court in all counties, that is, in every federal county within the United States of America, depending on or based on the population of the county, and thus may be There are many courts in different cities. Bankruptcy courts are supervised by a group of bankruptcy judges who are appointed for at least 14 years, by competent and impartial federal judicial committees (3).

bankruptcy trustees

In fact, in cases of the vast majority of bankruptcy problems, the appointment of a trustee is automatically resorted to once the lawsuit is filed, knowing that the trustee is the one who manages the bankruptcy case by reviewing the debtor’s documents, and about cases of fraud and fraud in the bankruptcy system, and since the bankruptcy system is a system Federal, i.e. codified by the US Congress in bankruptcy law in the United States of America, bankruptcy fraud falls within the category or scope of the federal government in particular and is a bankruptcy fraud that includes oath and falsehood, and includes circumvention and non-disclosure of debts or Assets, and the manifestation of other fraudulent behavior, is a complete federal crime punishable by law, and therefore committing bankruptcy fraud can lead to serious consequences, most notably the person losing their discharge, prosecution, and eventual imprisonment.

Although the federal government closely monitors all cases of bankruptcy fraud, there is still a substantial opportunity for any creditor of the bankruptcy debtor to file a complaint against the debtor, and the complaint may seek to prevent or prevent the debtor from bankruptcy due to fraud. The complaint may request a ruling from the bankruptcy court that the debt owed to the creditor is not bankrupt in case of bankruptcy. The debt may be untenable under bankruptcy laws or because the credit was obtained by fraudulent means (3).

In conclusion, working within the scope of bankruptcy law is not approved in all countries of the world, and the implementation of this type of system requires study, awareness, and specialized people. Also, when choosing the people who will be covered by the bankruptcy system, they must be selected on many ethical grounds, so that they are trustworthy, Their assets are very clear to the owners of the jurisdiction, and if the person works individually or in an organization, a legal professional must be sought for assistance.