The bankruptcy procedure often begins with a bankruptcy petition that is presented by the debtor or creditor.
For debts that is big, a joint petition can be raised. The creditor must prove that the debtor cannot make the repayment and has failed to honor the treaty signed between the creditor and the debtor.
The judge or the court will decide if the petition is to be proceeded 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.
Within the next 21 days, the debtor has to submit a bankruptcy order to the appointed court official. With the order, the official will call for a meeting with both the debtor and the creditor. All the property of the debtor will be under the trustee and only a few properties will be exempted from the bankruptcy. Then the valuable items can be sold.
The official in charge of the debtor’s properties will have to sell the properties, proceeds from the sale will then be used to repay the debts owed.
There is a special case for secured debts as secured debts are not tied to the trustee for the debts. 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. 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. The Trustee is is a court assigned officer with certain authority. Also known commonly as the bankruptcy administrator, he has power to process the entire case of bankruptcy and repayment.
All debtors who files for bankruptcy must go for credit counselling course. Do ensure that you attend the course from the court appointed one. The course will educate you in the details of bankruptcy. One should be updated with the bankruptcy laws and the fees that is present for each chapter of the bankruptcy.
Post a Comment