The phrase “declaring bankruptcy” has been with us a long time, but what does it really mean? If you start a voluntary case, which is over 99% of all cases, you are simply telling your creditors you cannot repay your debts because you are in an insolvent state.
Sometimes the pure absurdity of comedy can help make the point. Here the boss in The Office series decides to file bankruptcy as in the video clip below:
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Indeed, Michael cannotjust yell “I’m declaring bankruptcy” out into the office pool or hallway. He has to find the proper forum.
That forum of course is the United States Bankruptcy Court. Only then, under the auspices of the federal government will the bankruptcy have binding authority on all creditors everywhere in the United States and even other countries.
Moreover, there are very specific forms and very specific rules and laws in the conduct of “declaring bankruptcy.” It is not that simple to “declare bankruptcy”, but with good guidance it can be done for the right reasons and appropriate circumstances. You have to decide whether to file under Chapter 13 or Chapter 7. Let LeverLaw help you if you live in the Los Angeles, Riverside, San Bernardino or Orange County in California.