Bankruptcy is a judicial proceeding conducted exclusively in the United States Bankruptcy Courts . There is at least one bankruptcy court in each state. Click on your home state to see the bankruptcy court or courts in your state. In a bankruptcy proceeding, a person or business files a petition requesting that the bankruptcy court grant the petitioner relief from repayment of some or all of their debts and temporary protection from legal actions by creditors. Although bankruptcy courts are federal courts and the laws on bankruptcy proceedings are federal laws , state laws also are involved in that the state laws and state constitutions govern the contractual relationships with in-state debtors.
Some states grant greater protection to debtors than others.
In another kind of bankruptcy proceeding commenced under Chapter 13 of the U.S. Bankruptcy Code , a petitioner requests that the bankruptcy court simply delay the collection of money due from the petitioner and allow the petitioner to catch up on his payments and pay off the debts over a longer period of time until all of the debts are paid back. Creditors must be willing to agree to the pay off plan. Although the proceedings are governed by different sections of the bankruptcy code, business entities like corporations and partnerships may also petition for relief and protection of the bankruptcy courts. This site provides general information only. USALawCentral is a commercial web site and has absolutely no connection with the United States Government nor any state nor local government.