Introduction To Bankruptcy Procedure & Process
Posted by desbtsettlementscams
The bankruptcy procedure often starts with a debtor filing a bankruptcy petitiont hat is raised by the debtor or creditor.
A group of creditors can give a joint petition if the debt owed is huge. The creditor must prove that the debtor has been unable to pay the debts taken and did not honor the agreement signed by the creditor and the debtor.
The court now comes in picture and will determine whether to declare a bankruptcy or not. If the bankruptcy is cleared to be declared, then the court will have to appoint an Official Receiver who takes the role of controlling the debtor?s property.
The debtor has to submit the Official Receiver within 21 days of the making of a bankruptcy order the statement of affairs. With the order, the official will call for a meeting with both the debtor and the creditor. The trustee will take control of the debtor’s property and will decide which property will be sold to repay the loans and only a few properties will be exempted from the bankruptcy. All the unexempted properties will be sold.
The trustee in bankruptcy has the responsibility to convert the debtor?s properties into money, so that the money can be used to be paid to the creditors or clearing the bankrupt?s debts.
A secured creditor does not depend on the trustee for the repayment of the debts that are due to them. If the sale is unable to produce sufficient funds for covering the debt, these secured loan will be first in line when it comes to claiming via unsecured loan. But if the sale exceed than the sum owed then the creditors need to pay that excess to the trustee so that is can be distributed equally among the other creditors. The Trustee is just an officer appointed by the court. The Trustee is also known as the bankruptcy administrator as he holds power to process the entire case of bankruptcy and repayment.
All debtors who files for bankruptcy must go for credit counseling course. Do ensure that you attend the course from the court appointed one. They will tell you about the repayment plans and other procedures that involves in the bankruptcy. One should be updated with the bankruptcy laws and the fees that is present for each chapter of the bankruptcy.
Do you understand the above bankruptcy procedure? I believe that you need to also understand Chapter 7 Exemptions
FTS0501
Leave a Reply