It is common for people to make mistakes and end up losing their jobs. Many times people take more loans when their credit rating is high and spend all the money only to find that their income has stopped and they have run into a huge debt trap. This is where the government laws come to be of help.
Under the provisions of the Federal Law, any individual or an organization can claim bankruptcy, thereby they get relief from having to pay and clear their outstanding liabilities. But it is not easy to declare yourself bankrupt without following the correct process as prescribed by the law.
Earlier on when you lost your income stream and could not afford to pay your loans, you could declare yourself bankrupt and get relief for the Government would cancel all the debts and you could again start your business or take up a job after a few years as prescribed by the law. It was very simple.
As in any society, people started misusing the law and started using this as a tool to get out of their debts easily. Therefore government has now made amendments to the rule and ensured that only genuine cases are able to file for bankruptcy and get relief. Things are now different.
Inspection and detailed assessment of the personal assets and liabilities is carried out by an independent team when an individual files for bankruptcy. Based on their recommendation the category and type of bankruptcy application is entertained.
Provisions of bankruptcy rules are contained in several chapters with most common cases falling between Chapter 7 to 13 and businesses come under Chapter 11. You application would be admitted under a specific chapter and only after this is determined will the further paperwork and process start.
The provisions contained in different chapters describe the conditions and terms applicable for different cases of bankruptcy which may not be clear to the common man, unless and until interpreted or guided by the lawyers who specialize in bankruptcy. Whatever be the chapter, you can not hope to get a hundred percent waiver and discharge of all your debts.
End of the process you would be asked to pay up a part of the debt outstanding and draw up a extended payment schedule to be able to make payments in future. With a bankruptcy record you are not a safe investment for banks and credit card companies. Hence they will not be willing to give you unsecured loans and your credit worthiness will be zero.
So be very careful before you file for bankruptcy. Unless otherwise you have no other option do not file for bankruptcy, for it does not make your life easier later. But if you do not have any other means to come up with money, then this is the only option available to you.
Under the provisions of the Federal Law, any individual or an organization can claim bankruptcy, thereby they get relief from having to pay and clear their outstanding liabilities. But it is not easy to declare yourself bankrupt without following the correct process as prescribed by the law.
Earlier on when you lost your income stream and could not afford to pay your loans, you could declare yourself bankrupt and get relief for the Government would cancel all the debts and you could again start your business or take up a job after a few years as prescribed by the law. It was very simple.
As in any society, people started misusing the law and started using this as a tool to get out of their debts easily. Therefore government has now made amendments to the rule and ensured that only genuine cases are able to file for bankruptcy and get relief. Things are now different.
Inspection and detailed assessment of the personal assets and liabilities is carried out by an independent team when an individual files for bankruptcy. Based on their recommendation the category and type of bankruptcy application is entertained.
Provisions of bankruptcy rules are contained in several chapters with most common cases falling between Chapter 7 to 13 and businesses come under Chapter 11. You application would be admitted under a specific chapter and only after this is determined will the further paperwork and process start.
The provisions contained in different chapters describe the conditions and terms applicable for different cases of bankruptcy which may not be clear to the common man, unless and until interpreted or guided by the lawyers who specialize in bankruptcy. Whatever be the chapter, you can not hope to get a hundred percent waiver and discharge of all your debts.
End of the process you would be asked to pay up a part of the debt outstanding and draw up a extended payment schedule to be able to make payments in future. With a bankruptcy record you are not a safe investment for banks and credit card companies. Hence they will not be willing to give you unsecured loans and your credit worthiness will be zero.
So be very careful before you file for bankruptcy. Unless otherwise you have no other option do not file for bankruptcy, for it does not make your life easier later. But if you do not have any other means to come up with money, then this is the only option available to you.
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