Bankruptcy – What does the process have in store?

Bankruptcy is usually considered as the last resort to get out of debt as it involves the court and the law and can be a complicated process. Here at we provide you information that can help you through this process. When you file for a bankruptcy, you basically have to hand over the control of your property and your assets to a bankruptcy Trustee. A Trustee is a person appointed by the bankruptcy court who takes control of all your in exchange of providing you protection from any legal action by your creditors. There is no minimum criteria for you to enter into a bankruptcy regarding the amount of debt you owe or the amount of property you have. In the process of bankruptcy, some of your assets might be sold in order to pay your debts. If you have an annual income which is above a certain amount, then you have to make regular monthly payments to your Trustee who will use it to pay your high priority debts. The duration of bankruptcy is usually 3 years, but it can be shortened or extended. After the process is over, all your debts are usually cleared.

When should you go for bankruptcy?

There are times when you wouldn’t have sufficient money to live on if you make all the monthly repayments that you are required to make to your creditors. This is also true if you are living on social security or have a low income such as below $43,000 gross. In such cases you should consider going for a bankruptcy. Once you have filed a bankruptcy, you will no longer be able to sell or deal with most of your assets or the items of value that you possess, the exceptions being the properties that are protected under the Bankruptcy Act. After filing a bankruptcy only the Trustee, ITSA or a registered trustee or a creditor with whom you have a secured only will be able to deal with your assets. The trustee may sell off your assets to pay for the creditors. Assets are defined to be anything of value which belongs to you at the date of bankruptcy along with assets which are acquired by you before the discharge occurs. This includes lottery wins, prizes of value and so on. It also includes your interest in land, money you have in bank accounts and so on. Thus you can go for bankruptcy at such times.

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