The situation is not entirely out of your control though. You may not be able to change the speed or steps of the process but you can certainly improve your experience. With a little self-study, you can approach each troubled loan with a clear understanding of all your options and the ramifications of going into default. And the best part is -- you need not even leave your desk to do this. Ample resources and guides are just a few clicks away on the Internet. Visit them once or twice to ground yourself in the basics of the bankruptcy system. Then return periodically to keep abreast of new legal developments and procedures.

First Stop
The Web page for the bankruptcy court in your jurisdiction should be your first stop. If you have loans outstanding to debtors that reside in or business entities that are organized in other jurisdictions, the home pages for those courts are important as well. Some 60 bankruptcy courts -- nearly all that exist -- have set up Web sites to disseminate information about their workings.

The easiest way to locate a bankruptcy-court site is through the U.S. state resources index at www.findlaw.com. Select the name of a state, then the court’s subheading. The first entries are typically sites for federal courts in or covering that state.

At this point, several results are possible, depending on the jurisdiction. There may be only one bankruptcy court listing, or there may be several links to bankruptcy courts with district names based on geographical divisions. (Larger states usually have three or four.) If you know your district, take that link; otherwise, visit the pages one at a time until you locate the appropriate district. (It should be easy to identify geographic scope from any homepage.)

If you don’t see a listing specifically for a bankruptcy court, look for a U.S. district-court link. In a few instances, district and bankruptcy courts share an umbrella Web site.

The actual contents vary from court to court but a number of helpful resources apply universally. At the very least, you will be able to find calendars showing the schedule of hearings and creditors’ meetings. Almost all bankruptcy courts post their local rules, which govern how cases proceed in their district. Some also post special rules or requirements of particular judges. The Bankruptcy Rules of Appellate Procedure are usually published online as well; these will come into play if a creditor or a debtor decides to appeal a decision made in a bankruptcy case. These rules may be dry reading but provide a detailed framework for understanding why the proceedings unfold as they do.

Many courts, particularly in California and Texas, make it a point to announce the latest developments in law and local procedure on their homepages. These usually take the form of headlines, which are immediately apparent as soon as the site loads. Click on hyperlinks to read full descriptions of the news.

The most important thing to look for, though, is a step-by-step explanation of the process. Many pages provide bankruptcy primers written with the layperson in mind. A few offer versions specifically slanted to the creditor. If you have trouble locating this information, look for the FAQ, a commonly used acronym on the Web that stands for Frequently Asked Questions.

Second Stop
One specific online primer should be your second stop, regardless of your jurisdiction. It is the exhaustive creditors’ FAQ from the U.S. Bankruptcy Court for the Western District of Texas, at www.txwb.uscourts.gov/cfaqe.htm. This document explains what happens at creditors’ meetings, the effect of filing a proof of claim, the role of the trustee, and, most importantly, how and when creditors may get paid. It also addresses communication with the court and the trustee (which should happen only through your institution’s attorney) and demystifies plans of reorganization, discharges and dismissals. The FAQ is also available in Spanish, as is a version geared to debtors.

Third Stop
The next step in your self-study is acquainting yourself with the Electronic Bankruptcy Noticing (EBN) program. This program allows creditors to receive notices in pending proceedings via e-mail. The program cuts down on paperwork for both courts and creditors and cuts the delivery time otherwise involved in using regular mail. To participate you must enter into a Trading Partner Agreement with the court. Although not all courts currently offer the program, it is being phased in across the county and should eventually become universally available. For an explanation of the program, an FAQ, a Trading Partner Implementation Guide and a list of participating courts, visit the Bankruptcy Noticing Center at www.ebnuscourts.com.

And Don’t Forget
ABI World, the American Bankruptcy Institute’s library Web site at www.abiworld.org, offers intelligible briefs of Congressional hearings, proposed changes in legislation and reports geared to business. (One recent report, for example, analyzed a shift in consumer bankruptcies.) The site also stockpiles the decisions of bankruptcy courts across the country. (These are not comprehensive but include rulings only by judges who have chosen to post their decisions.) You can use this site to discuss hot topics and problems with other lenders through ABI’s free interactive newsletter "Cracking the Code." This newsletter is posted on the site, rather than distributed by e-mail, and allows readers to post responses to current articles.

Another valuable news source is Bankruptcy Online at www.fedfil.com/bankruptcy. Bankruptcy news headlines are published on the site, which also offers two subscription newsletters. "The Federal Filings Bankruptcy News Wire" covers pending and threatened corporate Chapter 11 bankruptcies from an investor’s perspective; "The Daily Bankruptcy Review" targets financial and legal industry professionals and is available either by e-mail or on the Web.

Whether or not you decide to subscribe, bookmark both ABI World and Bankruptcy Online to keep up with the latest news and legal developments.

Originally published by SmartPros on July 17, 2000.

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