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U.S. Bankruptcy Code
Article 1, Section 8 of the United States Constitution authorizes Congress to "establish a uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States," and Congress exercised this authority by adopting the Bankruptcy Reform Act of 1978. When President Jimmy Carter signed the legislation into law on November 6, 1978, it was codified in Title 11 of the United States Code, more commonly referred to as the U.S. Bankruptcy Code.
The U.S. Bankruptcy Code has been amended several times since, perhaps most significantly with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Federal law governs jurisdiction, procedure, crimes, and tax implications in bankruptcy cases, but state laws typically determine the property rights of debtors.
Lawyer in Cincinnati, OH Discusses U.S. Bankruptcy Code
Are you interested in filing Chapter 7 or Chapter 13 bankruptcy in Ohio or Kentucky? You will want to make sure that you have legal representation to ensure that all required documentation is accounted for, and all the proper procedures are followed so you can have a smooth and efficient experienced in an often stressful situation so that
The experienced Cincinnati bankruptcy attorneys of Steiden Law Offices represent clients in communities throughout Hamilton County in Southern Ohio as well as Kenton County and Boone County in Northern Kentucky.
Call today to receive a free, confidential consultation that will let our lawyers review your case and help you understand all of your legal options.
Northern Kentucky U.S. Bankruptcy Code Information Center
- What is the U.S. Bankruptcy Code?
- What does the U.S. Bankruptcy Code say about student loans?
- Where can I find more information about the U.S. Bankruptcy Code in Cincinnati?
Chapters of the U.S. Bankruptcy Code
The U.S. Bankruptcy Code is divided into nine chapters. Different types of bankruptcies typically correspond with their respective chapter of the Bankruptcy Code.
The nine chapters listed under Title 11 of the United States Code include:
- Chapter 1 establishes general provisions about bankruptcy;
- Chapter 3 covers case administration about bankruptcy;
- Chapter 5 establishes laws related to creditors, debtors, and the bankruptcy estate;
- Chapter 7 applies to the liquidation process for consumers and businesses, usually involving the assets of a debtor that are not exempt from creditors being collected and liquidated, with the proceeds being distributed to creditors;
- Chapter 9 allows municipalities to restructure their debts;
- Chapter 11 allows an individual or business can reorganize its debts while continuing to operate;
- Chapter 12 allows a family farmer or a fisherman with regular annual income to file for bankruptcy, reorganize his or her business affairs, repay all or part of his or her debts, and continue operating;
- Chapter 13 applies to consumers with regular incomes who do not have more than a certain amount of debt and allows them to reorganize their financial affairs under a repayment plan that must be completed within three or five years; and
- Chapter 15 covers ancillary and other cross-border cases.
Chapter 7 and Chapter 13 account for the majority of all bankruptcy cases in the United States.
Student Loans and the U.S. Bankruptcy Code
In both Ohio and Kentucky, one of the most frequently asked questions about the types of debt concerns student loans. Title 11 U.S. Code § 523(a)(8) establishes that a bankruptcy discharge Section 727, 1141, 1228(a), 1228(b), or 1328(b) of the U.S. Bankruptcy Code will not discharge an individual debtor from any debt "unless excepting such debt from discharge under this paragraph would impose an undue hardship on the debtor and the debtor’s dependents, for:"
- an educational benefit overpayment or loan made, insured, or guaranteed by a governmental unit, or made under any program funded in whole or in part by a governmental unit or nonprofit institution; or an obligation to repay funds received as an educational benefit, scholarship, or stipend; or
- any other educational loan that is a qualified education loan, as defined in section 221(d)(1) of the Internal Revenue Code of 1986, incurred by a debtor who is an individual;
While private student loans made by nonprofit institutions of higher education were once the only types of loans that were excepted from discharge, the enactment of BAPCPA added an exception to discharge for qualified education loans, including most private student loans. Federal Student Aid (FSA), an office of the U.S. Department of Education, states that bankruptcy courts "do not use a single test to determine undue hardship but may look at the following factors to determine whether requiring you to repay your loans would cause an undue hardship:"
- If you are forced to repay the loan, you would not be able to maintain a minimal standard of living;
- There is evidence that this hardship will continue for a significant portion of the loan repayment period; and
- You made good faith efforts to repay the loan before filing bankruptcy.
While the three requirements listed above may not sound like much of a burden to prove, the truth is that proving an undue hardship often involves evidence of some extreme, life-altering obstacle. In most cases, student loans simply are not dischargeable in bankruptcy.
U.S. Bankruptcy Code Resources in Ohio
Title 11—Bankruptcy | Office of the Law Revision Counsel of the United States House of Representatives (OLRC) — The OLRC prepares and publishes the United States Code pursuant to section 285b of title 2 of the Code. Use this link to view the full text of the U.S. Bankruptcy Code. You can also use this website to view other sections of the Code pertaining to crimes (Title 18), the Internal Revenue Code (Title 26) and jurisdiction of bankruptcy courts (Title 28).
Lockhart v. United States, 546 U.S. 142 (2005)— James Lockhart failed to repay federally reinsured student loans he incurred under the Guaranteed Student Loan Program, and the loans were eventually reassigned to the Department of Education, which certified the debt to the Department of the Treasury through the Treasury Offset Program before the government began withholding a portion of Lockhart's Social Security payments to offset his debt.Lockhart sued in Federal District Court, alleging that the offset was time barred under the Debt Collection Act's 10-year statute of limitations, but the Supreme Court of United States unanimously held that the Debt Collection Improvement Act made Social Security benefits subject to offset and that the Higher Education Technical Amendments removed the 10-year limit that would otherwise bar the offset. In other words, the federal government has the power to collect defaulted student loans by offsetting Social Security disability and retirement benefits without a statute of limitations.
Steiden Law Offices | Cincinnati Bankruptcy Attorney
If you want to file Chapter 7 or Chapter 13 bankruptcy in Kentucky or Ohio, it is in your best interest to retain legal counsel who is knowledgeable in the U.S. Bankruptcy Code. Steiden Law Offices has decades of experience helping people file bankruptcy claims and discharging debt to achieve financial freedom.
Our Cincinnati bankruptcy lawyers assist individuals all over Southern Ohio and Northern Kentucky. They will provide an honest and thorough evaluation of your case as soon as you call or complete an online contact form to schedule a free initial consultation.
