Persons experiencing serious financial difficulty at some point may have to ask if it is time to look to bankruptcy. When overcome in debt with no apparent way out, this is sometimes the best solution to financial problems. Filing causes some serious consequences, so debtors should explore all avenues before proceeding to file with the courts.
The code governing these filings is divided into several different chapters. There are both advantages and disadvantages to the chapter that is used. Some chapters, such as Chapter 12 apply only in specific situations and may not be applicable in your case. You will want to be sure that you choose the correct chapter as there is an additional expense to convert from one form to another.
Filing a Chapter 7 petition places a stay on collections. This will stop phone calls and collection efforts of all kinds. It will only temporarily stop foreclosure proceedings. Chapter 7 prevents garnishment of wages. While there are a few exceptions of property that may be exempt, anything over these exceptions will be sold and the proceeds divided between the debtors. The total process is over within three to six months. Any income that is generated during the period belongs to the person filing the petition. Inheritances will be liquidated and distributed to the debtors. Once the proceedings are discharged, the person can start to rebuild credit.
Chapter 11 includes debt reorganization. This is one of the most complicated of the chapters on the subject and most persons filing for Chapter 11 will need the help of an attorney to work through this complex code.
When filing for a chapter 13, debtors present a play to make payments to the creditors. Creditors often push for fifty cents on the dollar, but with limited income, debtors may pay only one tenth of the debt over three to five years before it is discharged. The action also stops collectors from attempting to collect debt. The process takes more time than the Chapter 7 filing, but does allow the petitioner to keep all their assets.
In filing the petition, there are some debts that may not be stopped. Student loans and other debts that are owed to the government and civil judgments where the person filing caused injury or death while under the influence of drugs or alcohol are two notable examples where filing the petition will not stop collection efforts.
It is possible to purchase the necessary forms or a computer program that produces the forms. You may also decide that you would prefer to pay an attorney to take care of the paperwork. The more assets or higher your income, the more necessary it may be to need an attorney. The professional often knows how to best present your case to that court.
Bankruptcy Toronto has some very serious consequences. Until the case is discharged, the petitioners will not be able to take on any major debts without the approval of the administrator. After being the case has been discharged, the person may have difficulty in obtaining credit for vehicles or homes for as long as ten years.
If you have been searching far and wide for Bankruptcy Durham region alternatives that fit your particular lifestyle and situation, then a visit to Killen Landau & Assoiciates is a must.
Other articles you might like:
- Can I File For Bankruptcy If I Haven’t Filed Taxes? Consequences and Alternatives to Bankruptcy
- Bankruptcy Chapter 7 Vs Bankruptcy Chapter 13