When an organization cannot meet the mandated legal payments for the outstanding debts, then the individual or the organization will be declared bankrupt. It helps people who are drowning themselves in debt and gives them a chance to begin afresh. Hence, there are lots of bankruptcy success stories.
The Process of Bankruptcy consists of six stages
Step 1: Meetings with the Bankruptcy Trustee
In the majority of cases, a person who wants to file for personal bankruptcy will see a Bankruptcy Trustee on two occasions, at least before such trustee has had a chance to gather enough information and documentation to enable him or her to file the necessary papers with Industry Canada. The Trustee Bankruptcy will need to get the following information and documentation:
- All documentation evidencing the person’s full legal name
- Most recent tax records from employers
- Monthly expenditure report.
- List of owned properties and possessions.
- A complete schedule of debts and debts owed.
- Any available bank statements for any accounts held in the individual’s name.
Step 2: Filing the Bankruptcy Continuation
Filing a bankruptcy petition is the most dreadful task of all. A petition is a lengthy document that details and classifies every single one of your debts per prescribed rules and standards.
Step 3: Automatic Stay
When you petition the court for bankruptcy, the court normally pronounced a stay relief. Furthermore, the term ‘automatic stay’ means that the court forbids any efforts by your creditors to reach you concerning your outstanding debts.
In order to do this, the bankruptcy court serves the creditors a Notice of Filing and a Notice of Stay. This is to say that absconding from payment and taking further steps towards including suing you, for instance, becomes unlawful, and or counters are halted, respectively.
Step 4: Creditor’s Meeting
Approximately one or two months after the bankruptcy application, you and your lawyer will participate in a creditors meeting organized by the bankruptcy trustee. This type of meeting usually does not take more than one hour, can even last five minutes, and is attended just by you, your representative, and the trustee.
Creditors may be present to file their grievances or a rebuttal, but this is extremely unusual.
If you file a Chapter 7 case, the bankruptcy case will be concluded by the trustee giving his or her approval. If you file a Chapter 13 case, the bankruptcy trustee will prepare a repayment plan that will run for three to five years.
Step 5: Debtor Education Course
An approved debtor education course needs to be completed prior to the bankruptcy being confirmed. Most can be done over the internet and, on average, take about two hours.
Step 6: Notice of Discharge
The applicants are given a Chapter 7 process after the bankruptcy court has reviewed the chapter and found no glaring issues.
What is the Length of Time Involved in Filing Bankruptcy?
The entire bankruptcy process, especially in the case of Chapter 7 petitions, takes three to four months. Filing Chapter 13 is done at the same time as Chapter 7, but some of the debts are paid off after a while. The plan may span over a period of three to five years.
However, at the conclusion of either of these forms of filing the bankruptcy petition, the debts will be discharged, and all activities of the bankruptcy court will cease with respect to you.
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