How To Declare Yourself Bankrupt
This article was co-authored by Clinton M. Sandvick, JD, PhD. Clinton M. Sandvick worked as a civil litigator in California for over 7 years. He received his JD from the University of Wisconsin-Madison in 1998 and his PhD in American History from the University of Oregon in 2013.There are 22 references cited in this article, which can be found at the bottom of the page. This article has been viewed 25,187 times.
Filing for bankruptcy is the process of requesting that a legal court releases you from your obligations to your creditors.XTrustworthy SourceUnited States CourtsOfficial website for the U.S. court systemGo to source Individuals or married couples will typically file for either Chapter 7, Chapter 11, or Chapter 13 bankruptcy. The most common reasons for declaring bankruptcy involve costly personal problems like losing a job, going through a divorce, or coping with a serious illness/injury.XResearch source There is nothing shameful or irresponsible about having to declare bankruptcy, though it can have lasting implications on your credit. There are also a number of options available that may be able to help you avoid declaring bankruptcy. Learning how to evaluate your options and declare yourself bankrupt may help relieve some of your financial obligations, depending on the nature of your debts.
Can I Earn An Income
Yes, you can earn an income during bankruptcy up to a certain amount. If you earn above the threshold you will be required to pay to your Trustee half of the amount you earn in excess of the threshold.
Your Trustee will assess your expenses, based upon your particular circumstances and taking into account the number of dependants you support, and issue you will an assessment for the amount you need to pay for the year.
What Are The Pros And Cons Of Sequestration
The only benefit of filing for bankruptcy is that you get rid of your liabilities and get to start over again. This may suit the likes of Donald Trump who declared that filing for bankruptcy was a common business decision and that he was smart to make this move.
However, for the common person on the street, bankruptcy means a blemish on your name for many years. Being declared bankrupt will tarnish your credit rating for up to 10 years, making it difficult or very expensive to get traditional loans like a home loan, explains Charlotte Vermaak, principal of Chas Everitt Nelson in Mandela Bay.
After a period of 10 years after being declared bankrupt, the individual will automatically be considered rehabilitated, and free to trade and contract again. Alternatively, the individual can also apply for rehabilitation earlier than this, but this is at the discretion of the Court to whom an application must be made.
Bankruptcy should not be taken lightly as it could have a dramatic impact not only on your life but your spouses too, especially if you are married in community. Due to the fact that there is one communal estate of parties married in community of property, both parties to the marriage will be sequestrated and will be held liable for the debts incurred by the communal estate, says Cremen.
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Consequences Of Filing For Bankruptcy
Filing for bankruptcy has its advantages as noted above.
The debt is discharged where permitted. And there is an automatic stay put in place that prevents creditors from any further action on collecting the debt including sending you letters, calling you, or similar actions.
However, there are negative consequences as well. For example, if a bank has a lien on your home, the lien will remain after bankruptcy. You will still be subject to foreclosure if you default on that loan.
You may be able to make an agreement with your lender to take your loan out of bankruptcy through a process called reaffirmation. But you would still have to continue making payments.
Another negative consequence is the loss of privacy. Any personal financial information filed becomes accessible by the public. This factor alone sometimes dissuades debtors from filing for bankruptcy and has to be weighed against the benefits.
A credit score is affected by filing for bankruptcy, and the effect can be both negative and positive. Its negative in the short-term, and credit scores take a real dive. But bankruptcy provides a way to meet financial obligations in a responsible way going forward, perhaps more so than before filing. In the long run, credit scores can be rebuilt to levels higher than before filing.
If you are considering bankruptcy at all, it is wise to consult a bankruptcy attorney who can advise you on the current asset rules and restrictions as well as state regulations in your area.
Things You May Not Have Known About Filing For Bankruptcy In South Africa
Basic information on filing for bankruptcy in South Africa is available on the Internet. But rather than relying on hearsay or generic articles, seek legal advice from experienced insolvency attorneys. Voluntary sequestration is governed by the Insolvency Act and is a legal process. You need professional legal help throughout the process. We discuss some of the lesser-known issues regarding filing for bankruptcy in South Africa, helping you to understand why you need legal guidance to get out of debt.
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How To Go Bankrupt If You Are Already Abroad
If you are living abroad and are eligible to go Bankrupt in England & Wales the process is relatively simple. Since April 2016 you no longer have to return to the UK.
You can submit your application online. Using the Governments system you complete and submit the application form and pay your application fee via the web.
Once you are bankrupt you are required to have an interview with the Official Receiver . However it will be conducted over the telephone. You will not have to travel back to the UK to do this.
Even through you are living abroad you must remain in contact with the Official Receiver while you are bankrupt. If your financial circumstances change you are still legally bound to inform them.
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The Main Purpose Of Canadian Bankruptcy Law Is To Give A Person The Chance To Get A Fresh Start By Eliminating Their Overwhelming Debt That They Have No Hope Of Repaying
Need Help Reviewing Your Financial Situation?Contact a Licensed Trustee for a Free Debt Relief Evaluation
The minimum cost of a bankruptcy is $1,800 payable at the rate $200 each month for 9 months.
Our bankruptcy cost calculator will give you the exact bankruptcy cost based on your personal situation.
Once We Receive Your Application
If we accept your bankruptcy application, we’ll send you and your creditors confirmation in writing. This confirmation contains your AFSA administration number. Your creditors may ask for this.
If we don’t accept your application, we notify you in writing with the reason why.
If you submitted your Bankruptcy Form online you can log back into your account to see the status of your application and, once accepted, your AFSA administration number.
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Where Bankruptcy Doesnt Help
Bankruptcy does not necessarily erase all financial responsibilities.
It does not discharge the following types of debts and obligations:
- Loans obtained fraudulently
- Debts from personal injury while driving intoxicated
It also does not protect those who co-signed your debts. Your co-signer agreed to pay your loan if you didnt, or couldnt pay. When you declare bankruptcy, your co-signer still may be legally obligated to pay all or part of your loan.
Can I Stay In My Home While It Is Being Sold
Usually, if you are bankrupt, you are not expected to immediately move out of your home. In normal circumstances, the trustee will give you a few weeks to make alternative arrangements.
In some cases, the trustee may allow you to stay in your home during the selling period, provided you assist with the sale process, contribute a fair rent and maintain the home.
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How To File Bankruptcy For Free: A 10
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In a Nutshell
Chapter 7 bankruptcy is a powerful debt relief tool for American consumers and businesses alike. If your case is simple, you may not need a lawyer to file. Here’s a 10-Step Guide on how to prepare for and get a fresh start in the form of a bankruptcy discharge.
Written byAttorney Andrea Wimmer.
Filing any type of bankruptcy provides immediate debt relief through the automatic stay. Thatâs the law that prohibits creditors from contacting you as soon as your bankruptcy case has been filed. It also stops a wage garnishment right away.
How Chapter 7 Works
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court serving the area where the individual lives or where the business debtor is organized or has its principal place of business or principal assets. In addition to the petition, the debtor must also file with the court: schedules of assets and liabilities a schedule of current income and expenditures a statement of financial affairs and a schedule of executory contracts and unexpired leases. Fed. R. Bankr. P. 1007. Debtors must also provide the assigned case trustee with a copy of the tax return or transcripts for the most recent tax year as well as tax returns filed during the case . 11 U.S.C. § 521. Individual debtors with primarily consumer debts have additional document filing requirements. They must file: a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling evidence of payment from employers, if any, received 60 days before filing a statement of monthly net income and any anticipated increase in income or expenses after filing and a record of any interest the debtor has in federal or state qualified education or tuition accounts. Id. A husband and wife may file a joint petition or individual petitions. 11 U.S.C. § 302. Even if filing jointly, a husband and wife are subject to all the document filing requirements of individual debtors.
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How Long Will I Remain Bankrupt
Normally, bankruptcy lasts for 3 years and one day from the date that you submit your Bankruptcy Form. However, if you fail to co-operate with your trustee, that period of time may be extended for up to 8 years. You are also required to assist your trustee for a period of time after you are discharged.
It is possible to annul the bankruptcy to be released sooner than 3 years, either by paying your debts plus expenses in full. There are other legal options, including applying to court, but you should get legal advice first.
Do I Need To Declare Bankruptcy
In Australia, its only individual people who can declare bankruptcy.
If you have a company that cant pay all of its debts and needs to be closed, your company may need to be put intoliquidation.
If there are debts in your personal name which you arent able to pay, you may be considering if you need to declare bankruptcy, or if there are any other alternatives available in your situation.
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The Basics Of A Nova Scotia Bankruptcy
While Nova Scotia is allowed to set its own bankruptcy exemption limits, the federal government establishes most regulations for bankruptcy in the province. Simply put, bankruptcy is the option of last resort for regaining control of your finances after you get in over your head in debt. It allows you a clean start in your finances and eliminates most debts that are not secured by an asset such as a house. If you owe at least $1,000 in unsecured debt, you are eligible to file for bankruptcy.
Residents file for bankruptcy through a licensed bankruptcy trustee. This trustee establishes a trust made up of a debtors assets from which a debtors various creditors are paid. As a result, creditors recover some of what they have loaned to a person who files for bankruptcy as long as the debtor still owns some tangible property. There are exemptions when it comes to what debtors must hand over to their trustee, which means that all people who file for bankruptcy get to keep something. After a period typically lasting nine months, the trustee recommends discharge, and, if approved, the bankruptcy is made official. At that point, all debts covered by the bankruptcy proceedings are erased.
The Remaking Of Thebankruptcy Regulations
On 1 April 2021, the Bankruptcy Regulations 2021 commenced to address the sunsetting of the Bankruptcy Regulations 1996.
The Bankruptcy Regulations 2021 remade the Bankruptcy Regulations 1996 in substantially the same form with minor and technical amendments aimed at modernising references and ensuring alignment with the Bankruptcy Act.
The Bankruptcy Regulations give form to many administrative requirements of the Bankruptcy Act necessary for the efficient administration of bankruptcies, debt agreements and other formal personal insolvency options governed by the Bankruptcy Act.
More information about key changes implemented by the Bankruptcy Regulations 2021 is available on the AFSA website.
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Can You Go Bankrupt If You Have Moved Abroad Within The Eu
Prior to April 2016 if you moved from England & Wales to another European Union county you could still declare yourself bankrupt in the UK for 3 months.
However changes were introduced in April 2016 as a result of the Enterprise and Regulatory Reform Act. Now as soon as you move to another EU country you lose the right to go Bankrupt here.
Where you live in another EU country and find that you are struggling with your debts in the UK you will have to use the insolvency rules and procedures in your local country.
If you live within the EU you can become eligible to go Bankrupt in the UK once again if you move back and live here for the greater part of 6 months.
Mail Documents To Your Trustee
The Chapter 7 trustee is an official appointed by the court to oversee your case and liquidate, or sell, nonexempt property for the benefit of your creditors. Not all types of bankruptcy require the involvement of a bankruptcy trustee, but both Chapter 7 and Chapter 13 cases have one.
Pay attention to mail you receive from the trustee after filing your case. The trustee will send you a letter asking you to mail them certain financial documents, like tax returns, pay stubs, and bank statements. If you donât send the trustee the requested documents following the instructions provided in their letter, you may not get a discharge of your debts.
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You Will Need Identity Documents
You can apply for bankruptcy online by creating an Online Services account. To create an Online Service account, youll need to confirm your identity.
You will need 2 forms of ID documents to do this. Common documents you can use include:
– Medicare card
You can either create a Digital Identity or an AFSA account.
- Digital Identity is a simple, safe and secure way to prove who you are. Once set up, you can reuse it with other services whenever you need it. Learn more about Digital Identity.
- An AFSA account is for use on our website only. AFSA uses the Australian Government Identity Matching Services to help you prove who you are. Learn more about IDMatch.
If you need help, see Get help with creating an Online Services account.
Our Consulting Process Is Simple:
- We get to know each other.To determine whether you qualify for Sequestration , we need to ask you several questions to give us an understanding of your financial situation.We need to understand your unique situation and needs thoroughly as you consider applying for Sequestration. It is also important that you fully understand the entire legal process you will be a part of.
If Sequestration is an option for you, we will send you an assessment form to complete.
The form gives us more information on your debt situation to develop a comprehensive plan and start to discuss costs and affordability.
Our attorney will provide the costs for the Sequestration and the repayment period. This could be 12 to 18 months.
We will set up a meeting with you to discuss the legal process and costs.
We prefer to meet our clients in person, and if you can travel to our offices in Centurion, we will set up a meeting that will last roughly an hour. If it is not possible for you to attend a meeting at our offices, we will set up a telephone call or use an online platform.
During this meeting, the Sequestration legal process, applicable to your individual situation, will be explained to you and the payment plan that we can help you with.
When you decide that Sequestration is the process you want to follow, Ursula Gouws and her team will be with you from start to finish.
We will support you and ensure that your personal financial needs are also met.
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