Personal bankruptcy law enables, in some states, an individual to become bankrupt. Almost every state with a functional legal system has some type of debt relief program for individuals struggling with high debt balances. Personal bankruptcy is often distinguished from other forms of bankruptcy by its much more limited scope and procedures. This article will explain the different types of bankruptcy and why the court system may choose one form over another.
Chapter 7 bankruptcy An individual filing personal bankruptcy will present a detailed financial statement to the court. The court then determines if the individual can pay off all or a part of the debts stated in the statement. The court then issues a chapter 7 bankruptcy order that instructs the trustee to sell debt assets held by the individual to pay off the debts. This process is completed to discharge the debts in full.
Personal chapter 7 bankruptcy begins with a notice that the individual's debts have been listed. The trustee then begins the investigation process. If the assets cannot be sold and the amount doesn't cover the debts, then the court will issue a payment plan that will allow the debtor to make regular payments to satisfy the debt. Once the payments are made, the court declares the debtor as insolvent and the trustee must liquidate the remaining assets to repay the debt.
Chapter 11 bankruptcy An individual filing a chapter 11 bankruptcy will present an accurate summary of their assets and debts to the court. They will also present a proposed budget and request permission to liquidate the remaining assets to pay their debts. Only after approval by the court will the trustee begin the liquidation process. Once the property is sold, all monies will be distributed to the creditors. To complete the transaction, all applicable taxes on the proceeds must be paid.
Chapter 13 bankruptcy A person filing a chapter 13 bankruptcy will also present an accurate accounting of their income and debts. After this section is completed, they will present a plan for paying off the debts. They will also request an installment agreement, so they can get their credit cards re-closed. If all of the conditions of the chapter have been met, the court will officially declare the debtor as discharged and discharge them from all obligations. Check out this site https://foxmiles.ca/bankruptcy/ for more details.
Personal business bankruptcy If an individual has less than a million dollars of unsecured debt, they will most likely qualify for a chapter 7 bankruptcy. To be considered for a chapter 7 bankruptcy, you must prove to the court that your financial problems are beyond your ability to pay. This includes bad debts such as credit card balances, student loans, tax liens, unpaid taxes, and other financial burdens. While these cases do result in a discharge, the court does not release assets in these cases. To gain discharge, you must prove to the court that no viable solution exists to eliminate your financial hardship. If you are unable to do so, the court will allow your bankruptcy case to proceed.
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