File for Bankruptcy
The mention of bankruptcy usually sends chills down peoples spines. It is often thought of as a measure of last resort and usually undertaken when all other methods to resolve debt problems have failed. Bankruptcy is a legal process and if administered properly can offer protection from financial obligations. It relieves the debtors from their legal obligation to pay the outstanding funds, as well as protects their future earning and assets from repossession.
There are a number of steps in the bankruptcy filing [http://www.cicaconsulting.com] process: selection of the trustee company, submission of required documentation, trustees attendance of the creditors meeting(in some cases the debtor has to attend), selling of the assets(not all the possessions are sold, there are certain thresholds put in place by the Office of the Superintendent of Bankruptcy i.e clothes, car if not exceeding a certain worth, and other items that are generally considered a necessity ), attending two credit counseling sessions, attending discharge hearing if required etc.
The discharge process takes from nine to twenty four months. This depends on the financial position of the debtor, demands of the creditors, and the previous credit history of the debtor(bankruptcy filing in the past).
In the situations where the debtors earning capabilities are significant the debtor may be required to pay a surplus payments for the period of the discharge. The maximum income thresholds are set annually and the debtor will be required to pay 50% of the sum that is left over after subtracting the maximum earnings amount from the monthly net income.
Upon discharge the debtor is legally relieved from his obligations to the unsecured creditors. The bankruptcy record stays in the credit file for seven years from the discharge date, and in the cases where the debtor have been bankrupt before, for up to fourteen years.
Once the debtor is bankrupt [http://www.cicaconsulting.com/71/personal-bankruptcy-term-dictionary]:
-They will stop making payments directly to the unsecured creditors;
-Garnishments against the salary will stop;
-Lawsuits against them by their creditors will be stopped
Although bankruptcy offers relief and protection from unsecured creditors not all the debts can be written off.
Some of the debts that are excluded:
-Child Support Payments
-Traffic Tickets
-Court Ordered Fines and Penalties
-Student Loan debt that is not older than seven years
-Secured Debt i.e. a loan secured by a property
Generally, bankruptcy is avoided, and is not the preferred method for settling debts but in some situations it is an excellent solution to honest but unfortunate individuals. Although it is a painful process, it often offers a fresh start with a clean slate.
There are a number of steps in the bankruptcy filing [http://www.cicaconsulting.com] process: selection of the trustee company, submission of required documentation, trustees attendance of the creditors meeting(in some cases the debtor has to attend), selling of the assets(not all the possessions are sold, there are certain thresholds put in place by the Office of the Superintendent of Bankruptcy i.e clothes, car if not exceeding a certain worth, and other items that are generally considered a necessity ), attending two credit counseling sessions, attending discharge hearing if required etc.
The discharge process takes from nine to twenty four months. This depends on the financial position of the debtor, demands of the creditors, and the previous credit history of the debtor(bankruptcy filing in the past).
In the situations where the debtors earning capabilities are significant the debtor may be required to pay a surplus payments for the period of the discharge. The maximum income thresholds are set annually and the debtor will be required to pay 50% of the sum that is left over after subtracting the maximum earnings amount from the monthly net income.
Upon discharge the debtor is legally relieved from his obligations to the unsecured creditors. The bankruptcy record stays in the credit file for seven years from the discharge date, and in the cases where the debtor have been bankrupt before, for up to fourteen years.
Once the debtor is bankrupt [http://www.cicaconsulting.com/71/personal-bankruptcy-term-dictionary]:
-They will stop making payments directly to the unsecured creditors;
-Garnishments against the salary will stop;
-Lawsuits against them by their creditors will be stopped
Although bankruptcy offers relief and protection from unsecured creditors not all the debts can be written off.
Some of the debts that are excluded:
-Child Support Payments
-Traffic Tickets
-Court Ordered Fines and Penalties
-Student Loan debt that is not older than seven years
-Secured Debt i.e. a loan secured by a property
Generally, bankruptcy is avoided, and is not the preferred method for settling debts but in some situations it is an excellent solution to honest but unfortunate individuals. Although it is a painful process, it often offers a fresh start with a clean slate.