BANKRUPTY REIGNS SUPREME

When people file a bankruptcy case, they are filing under Federal Law. Many people are unaware the power that this entails. There is a hierarchy in the Judicial System which is important to understand. Most of us are familiar with the U.S. Supreme Court and are aware that the U.S Supreme Court is the highest Court in our Nation. After the U.S. Supreme Court the Federal Court of Appeals are next in line, then the Federal District Courts, and then our State Courts. Bankruptcy cases are filed in the Federal District Courts and due to the Supremacy Clause of the Constitution; a Bankruptcy Case trumps most State Court actions.The Supremacy Clause of the Constitution states that the "Constitution and the laws of the United States...shall be the supreme law of the land...anything in the constitutions or laws of any State to the contrary notwithstanding." This means of course, that any federal law--even a regulation of a federal agency--trumps any conflicting state law. This is found in the Preemption Doctrine of the Supremacy Clause. What this means to you and me is that when you file a Bankruptcy Case in Federal District Court there are instances where an individual must receive permission from the Federal District Court Judge to continue with a matter at State level. This also means that some state level lawsuits are defeated by the power of the federal bankruptcy filing. Check out more great bankruptcy articles at: http://www.bankruptcyhome.com/articles.htmThe best example of how the Supremacy Clause works in a bankruptcy matter is when an individual files a bankruptcy case then is confronted with the possibility of divorce. It must be told to that individual that he or she must file a motion to get permission from the Bankruptcy Court in order for the protection of the bankruptcy to be removed for the specific purpose to obtain a divorce. The reason for this is that upon filing a bankruptcy case, there is an automatic stay that takes affect, which is an invisible umbrella of protection over all of your property. In most cases, when an individual is seeking a divorce, property is involved, property that must be divided equally between the two spouses. Therefore, in order for a State Court to be able to divide the property of an individual who is in bankruptcy at the Federal Court level, the protection of the bankruptcy must be removed for a temporary period of time so that the State Court upon signing the divorce decree does not over step its authority by dividing property of the bankruptcy estate that the Federal Court has original jurisdiction (power) over. The above example is one of many instances where the filing of a Bankruptcy case in Federal Court controls state litigation. Bankruptcy cases can also prevent orders from state courts allowing garnishment, most judgments handed down in state court civil litigation, and even default judgments where the client failed to appear at his state court hearing. The filing of a bankruptcy case is a powerful tool that carries a lot of weight. It amazes me at times, the ability that many clients have to defeat state actions that they though were not possible. Many clients and creditors eventually understand that a bankruptcy case reigns supreme. Read more about filing bankruptcy at: http://www.bankruptcyhome.com/filing-bankruptcy.htm

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