WHAT IS INDEBTEDNESS?
Bankruptcy is a legal procedure designed to shield debtors who cannot repay their debts from harassment, litigation, and penalties imposed by creditors. It is a provision of the Bankruptcy Code that allows you to legally suspend your debts and refrain from paying them pending court proceedings. By declaring bankruptcy, you attest to the following facts:
Your debts and liabilities exceed your assets.
In the near future, it will be impossible for you to pay everyone what they are owed in full.
Please note that this article focuses solely on personal bankruptcy and not business bankruptcy.
WHAT SHOULD GO INTO MY DECISION TO DECLARE BANKRPUTCY?
Your reasonable belief that you have unresolved debts that exceed your ability to pay them back in the near future is the most common (and correct) reason to file for bankruptcy. Typically, the near term is defined as 12 to 18 months.
There may be multiple causes for this condition. Most common are job loss, divorce, medical treatments, substantial investment loss, and government or court action to freeze assets.
HOW SHOULD I PREPARE FOR INVOLVEMENT IN BANKRUPTCY?
Before hiring a counsel, conduct some research. Realistically, for the next 12 months, you should enumerate your income, assets, and liabilities.
Before declaring bankruptcy, consider other options. These include negotiating a reduction in your liabilities, negotiating a longer-term payment plan with your main creditors, and contesting major claims.
Communicate with your dependable acquaintances and family members. You do not want them to learn that you are insolvent from a third party, as bankruptcy filing is a public, searchable event. Describe your motivation, the impact on your lifestyle, and the advantages. And, critically essential, how to exit bankruptcy in a reasonable amount of time.
After deciding to file for bankruptcy and compiling a list of the aforementioned items, you should retain legal representation. Consult debt counselors only if you believe they can significantly reduce your debt burden or extend your payment terms.
WHAT HAPPENS TO MY DEBTS IN BANKRUPTCY?
They are suspended, meaning that you are not required to pay them until a judge hears your case.He may issue a payment order or suspend payments indefinitely. But remember,
WHAT OCCURS DURING BANKRUPTCY?
A hearing is held in front of the judge or his scribe. You should be consistent with your side of the argument, as there may be challenges from individuals who believe you are concealing fortune.
The judge inquires about your or your attorney's intentions to operate as an insolvent party. You are required to adhere to a plan until your discharge. The proposal may include a request for debt cancellation.
Remember that certain debts, such as payroll obligations to the IRS, do not disappear.
Best of success""
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