Advantages of Bankruptcy
Personal bankruptcy is one of the options, which often must be considered if you are unable to satisfy your debts when they are due. If you are made bankrupt for the first time and have debts you will normally be discharged a year after the bankruptcy order date. In some cases the time period may be shorter. If you find yourself insolvent it is necessary that you keep an open mind to bankruptcy as a viable option.
You are made bankrupt in three ways, namely
Involuntary- Here a creditor who you owe takes action. There is a minimum amount that must be owed before this is applied for.
Voluntary- Here you decide to enter into bankruptcy.
The supervisor of and IVA that you are bonded by.
Irrespective of whether or not you choose not to acknowledge or agree to a bankruptcy proceeding, you cannot prevent the bankruptcy order from being made. It is advised that you cooperate fully should proceeding begin. Once you dispute a claim made against you by a creditor you should do your best to get a settlement prior to the bankruptcy settlement being heard. If you wait until the bankruptcy order has already been made it will be more difficult and will cost you more.
In spite of the stigma attached to bankruptcy there are some bankruptcy advantages that will benefit both creditor and debtor you should consider.
Delaying the collection proceedings. This stop any creditor from trying to directly collect the funds owed to them.
Most of your debts will be discharged. Once this is done, you will not have any more obligations to repay particular debts.
As debtor you will be able to dispute any claim from a creditor that you believe is more that what is owed.
Relief from the stress associated with creditors calling you regularly. Bankruptcy will put a stop to this and offer you some relief.
When you are declared bankrupt by the courts that’s when as official receiver will be appointed to handle the repayment of your debts. The receiver will have the power over your assets and your incoming funds and will decide how much is paid to each debtor at any point in time until each debt is repaid if possible.
Bankruptcy ensures that your creditors get a fair amount of what you are able to afford to pay and also ensures that you can discharge your debts and start over anew.
So once you are in trouble financially and are unable to repay your debts you should do something about it by speaking to a expert in the process like a financial advisor. This person should be able to give you ideas as to the best debt solution for you and how to handle it.
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