Bankruptcy is a legal process that allows creditors to recover their debts and borrowers to offset their bad debts. There are different types of bankruptcies for different types of debtors. There are also strict rules and requirements that must be met for a consumer to be declared bankrupt. A chapter 7 Monterey residents should know, is the default bankruptcy option.
Not all types of debtors can apply for bankruptcy. There are strict rules that are meant to prevent consumers from abusing the legal tool. Both individual and corporate debtors can apply for this option. Basically, any type of debt consumer can apply for bankruptcy relief. It does not matter how big the debt is. A trustee is normally appointed by the court to supervise the process.
This bankruptcy option basically involves liquidation of assets belonging to the debtor. Anything of value will be auctioned off to recover funds that will be used to pay off the creditors. In return, the difference between the proceeds of the sale and the outstanding debts will be written off. Creditors will also get a chance to have all the losses associated with debt forgiveness written off.
After being declared bankrupt, the first benefit you will enjoy is automatic stay. This prevents creditors, collection agencies and other agents of the creditor, from communicating with you in any way. This means that you will have peace of mind. The main benefit enjoyed by creditors is the chance to resolve their loan books and get a tax deduction.
Bankruptcy might have many benefits, but it also has some shortcomings. For one, your credit report will have a bankruptcy entry, thereby preventing you from securing affordable credit. This may also prevent you from getting a great job in the financial sector because you will be considered financially incompetent. The bankruptcy will also be public knowledge, which means that some people might know about your predicament.
Some debtors may not qualify for this option. For instance, if you have a huge monthly income, debt reorganization may be recommended as opposed to liquidation. This means that you would have to come up with a plan to offset your debts in several monthly installments. If you do not qualify for this option, chapters 11 and 13 may be recommended for business and individual debtors respectively.
Wealth declaration is the most important requirement in the process of filing for bankruptcy. The court must be informed about your debts, income and assets. Furthermore, the trustee will go through your recent property transactions to identify any mischief. If there is any, the application will be rejected. If not, the trustee will make the necessary arrangements for the auction.
There are some debts that can never be written off. The first is your student loan debt. This can only be written off when you die. Child support and spousal support payments can only be modified by a family court, so they cannot be written off.
Not all types of debtors can apply for bankruptcy. There are strict rules that are meant to prevent consumers from abusing the legal tool. Both individual and corporate debtors can apply for this option. Basically, any type of debt consumer can apply for bankruptcy relief. It does not matter how big the debt is. A trustee is normally appointed by the court to supervise the process.
This bankruptcy option basically involves liquidation of assets belonging to the debtor. Anything of value will be auctioned off to recover funds that will be used to pay off the creditors. In return, the difference between the proceeds of the sale and the outstanding debts will be written off. Creditors will also get a chance to have all the losses associated with debt forgiveness written off.
After being declared bankrupt, the first benefit you will enjoy is automatic stay. This prevents creditors, collection agencies and other agents of the creditor, from communicating with you in any way. This means that you will have peace of mind. The main benefit enjoyed by creditors is the chance to resolve their loan books and get a tax deduction.
Bankruptcy might have many benefits, but it also has some shortcomings. For one, your credit report will have a bankruptcy entry, thereby preventing you from securing affordable credit. This may also prevent you from getting a great job in the financial sector because you will be considered financially incompetent. The bankruptcy will also be public knowledge, which means that some people might know about your predicament.
Some debtors may not qualify for this option. For instance, if you have a huge monthly income, debt reorganization may be recommended as opposed to liquidation. This means that you would have to come up with a plan to offset your debts in several monthly installments. If you do not qualify for this option, chapters 11 and 13 may be recommended for business and individual debtors respectively.
Wealth declaration is the most important requirement in the process of filing for bankruptcy. The court must be informed about your debts, income and assets. Furthermore, the trustee will go through your recent property transactions to identify any mischief. If there is any, the application will be rejected. If not, the trustee will make the necessary arrangements for the auction.
There are some debts that can never be written off. The first is your student loan debt. This can only be written off when you die. Child support and spousal support payments can only be modified by a family court, so they cannot be written off.
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