Filing bankruptcy? Understand the Bankruptcy Procedure
Written by ady on July 11, 2009 – 9:48 pm -The bankruptcy procedure usually begins with a bankruptcy petition that is raised by the debtor or creditor.
For debts that is huge, a combined petition can be raised. The creditor must prove that the debtor has been unable to pay the debts taken and has failed to honor the agreement signed by the creditor and the debtor.
After the raising of the petition, the court will decide if the it is OK to declare bankruptcy. If the bankruptcy is cleared to be declared, an official will be appointed to take charge of 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 official in charge of the debtor’s properties will have to sell the properties, 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. After the sale of the debtor’s property if that amount is not enough to clear the secure loan, then the creditor has the option to claim the balance amount as an unsecured creditor. On the other hand, if the sale of the debtor’s property is more than the debts owe combined then the repayment will be distributed equally. You may want to ask: Who is this Trustee? The Trustee is just an officer appointed by the court. The Trustee is also known as the bankruptcy administrator as he holds responsibilities of supervising the filed cases and activities between the creditors and the debtor.
Make sure to take counseling from an approved agency before filing for bankruptcy. 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.
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Posted in Bancruptcy |