Common Questions about Bankruptcy
Filing for bankruptcy is the last option that anyone will want to resort to, especially in these times of economic uncertainty. Some think of it as a sign of failure in life, as a sign that one has been irresponsible and has spent too much money. However, contrary to popular belief, bankruptcy is actually something that can save individuals hopelessly in debt—and allows them to have a fresh start.
Proper research before filing bankruptcy helps a lot, since some people actually do not need to petition for bankruptcy to clear their debts. Sometimes, one just needs to talk to creditors to get new payment schemes or extensions. In some cases, especially for people without income, bankruptcy is the only solution, since they won’t be able to pay for debts, anyway.
Filing for bankruptcy means that one still needs to shell out money. Doing so usually costs between $185-$300 dollars. Joint petitions with a spouse amounts the same. One must also note that there will be lawyer’s fees as well, which range from about $1,000 to $2,000.
Personal bankruptcy is a voluntary form of bankruptcy. However the possessions one gets to keep are limited. Depending on one’s location and the case involved, he may keep or lose things, such as cars and jewelry. Exempted items may include one’s home, cars to a certain value, clothing, appliances, necessary furniture, pensions, and a few more items.
A trustee in bankruptcy is someone charged by the administrator of the case to acquire and liquidate the bankrupt’s assets to the creditors owed by the individual. The trustee is likewise responsible for other tasks, such as call meetings between the creditors and debtor. He may also assist the debtor in creating a consumer proposal for the creditors and must also arrange required counseling for the bankrupt. Finally, the trustee is responsible for the pre-discharge report.
Once the personal bankruptcy petition has been granted, the law requires creditors to stop pestering the debtor, unless there has been an agreement to a new payment plan. An individual shall also be discharged from bankruptcy in about five months. However, one should remember that bankruptcy does not erase all debts, which include student loans, debts caused by injury or death, and debts for income tax and child support.
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