This goal is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts.

What is the bankruptcy clause?

The United States Constitution (Article 1, Section 8, Clause 4) authorizes Congress to enact “uniform Laws on the subject of Bankruptcies throughout the United States”. However, state laws are often applied to determine how bankruptcy affects the property rights of debtors.

Who is responsible for paying utility bills after bankruptcy?

Of course, you are responsible for paying new, post-bankruptcy utility charges as they come due. If you fail to pay the new charges on time, the utility company can collect on those accounts, including termination of utility services.

How does the Bankruptcy Code protect the debtor?

The Bankruptcy Code allows an individual debtor (4) to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of the debtor’s home state. 11 U.S.C. § 522(b).

What happens to your debt when you file bankruptcy?

Bankruptcy is a procedure designed to provide financial relief to people or organizations experiencing the overwhelming burden of debt, ultimately ceasing all collection activity from creditors. This means once someone declares bankruptcy, in most cases a creditor can no longer take any action against the debtor for the outstanding debt.

How are bankruptcy courts established under the Constitution?

This means the courts were established by Congress under its legislative authority to create courts under Article I, Section 8 of the Constitution. Under the federal statute 28 U.S.C. 1334, bankruptcy courts have exclusive jurisdiction over bankruptcy cases. This means a bankruptcy case cannot be filed in state court.