When you know that you owe some creditors a large sum of money, you might consider bankruptcy. Bankruptcy is not a forever condition, but a solution to the present situation and also the opportunity to start all over again.
What does bankruptcy mean?
Bankruptcy is the legal condition of clearing unpaid debts. All your properties and your goods and any other income are used to clear the liability to your creditors. The good thing is that with bankruptcy, usually a large part of the debts are also canceled.
What are the consequences of bankruptcy?
Your benefits can be sold
When you go bankrupt, all your goods can be sold to pay your creditors the money that you owe them. For instance, if you own a car, a laptop, pieces of furniture, or even a property, you will have to give them up. Equity might be alleged here if a property value is more than your mortgage. Equity allows for a relative or close friend to buy out your allotment of the property.
Your receiver will have access to your revenue, and if it is the case, they will release payments to the creditors. You might need to sign an agreement of monthly payment to your creditors for a fixed sum of money. The deadline is three years. If you refuse to sign the agreement or you simply don't respect the monthly payment agreement, the receiver can obtain a court order to ask you to pay your debts.
For any further changes, you should let your receiver know. You will have to pay the monthly household debts that occurred after your bankruptcy.
When you are bankrupt, you must:
Let your receiver know any detail regarding your incomes, debts, and creditors
Give your Receiver any goods you have with all the necessary paper that accompanies your assets
Inform your Receiver about any source of income while you are bankrupt or after your bankruptcy
No longer open or use credit cards
Obtain any credit that surpasses 500 USD without letting your creditor know that you were bankrupt
Still, you can open a basic bank account even after bankruptcy. Consult a bankruptcy law firm to learn more about the various types of bankruptcy and their consequences. Your lawyer will represent you and help you make the best financial choices during your bankruptcy process, so choose someone who you trust.
Contact a law office like Haven Law Group, P.C. for more information and assistance.