A person may face lot of troubles in his or her life but everything has a solution in the present day. Bankruptcy is a legal proceeding carried out, when an individual fails to repay the outstanding debts obtained from a creditor. It involves the total estimation of debtor’s properties and assets, which are used to refund a part of obtained fund. Once this is done, the borrower is relieved from the debt contract for which he has been declared bankrupt. It involves proper agreement between creditor and debtor with accurate financial statements that is examined. Moreover, a bankruptcy assures a person with a fresh start by eliminating debts using the assets held by him. Overall, filing a bankruptcy saves the economy of both the parties that guarantees debt refund.
Applying For Bankruptcy
Any individual can apply for bankrupt to the court through petitions. If a person can solve the financial debts only by bankruptcy, then he or she has to reach the appropriate court for applying. Note that not all courts issue bankruptcy orders and if there is any issue they can get advice from a bankruptcy lawyer in West Dundee IL. A debtor can also request the creditor for filing bankruptcy that solves the entire confusion.
When a bankrupt order has been issued, you have to be ready to submit all your property value and financial interest of the assets to the official trustee. This trustee handles all your bankruptcy progression and helps in bringing your financial problem to a halt. This person collects details about finances and saves your properties for solving your creditor’s problem.
How to Act When Bankruptcy Order Has Been Declared?
It is important for a person to co-operate accordingly with the trustee and official receiver. The person has to follow the non-payment rule that involves non-payment of debts to your creditors with certain limitations. Debtor has to pay extra charges that are not categorized in the order such as fines, loans, fees and the likes. This will help in smooth progress to end all the fund debts effectively.
After Effects of Bankruptcy
Suppose, you are running a business on your own, then bankruptcy leads to the entire closure of your business. The employees linked with the company will be affected greatly and their employment contract will be damaged. The bankrupt person has to give all the assets and money to be used in reducing money debts. The person’s bank accounts are closed by respective banks and they cannot also be able to open new accounts.
How Bankruptcy Helps A Creditor?
Once the creditor has applied for bankruptcy, the financial debts are processed using a trustee. Creditors cannot receive their money directly from debtor. Instead, the financial trustee manages all the payments obtained by selling the debtor’s assets to respective creditors. Sometimes, the debtors pay the debts to creditor by sparing the income, which is known as Income Payments Agreement or Income Payments Order.
Period of Bankruptcy
If a court has issued bankrupt order, it lasts for a year and then the debtor is relieved from the debts. It may end earlier, if the official receiver completes all the paper work without any objection from creditors. Sometimes, it may extend if a debtor doesn’t cooperate with the official person. Hence, it is important for a person to act accordingly to eliminate complications at the earliest by contacting a bankruptcy lawyer in west Dundee IL.