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Filing Bankruptcy - Know About The Advantages

Filing Bankruptcy - Know About The Advantages
"""Bankruptcy is the inability of an individual or business to repay its debts. In legal terms, bankruptcy is the complete or partial discharge of the debts of a person or organization that is typically unable to meet its ongoing financial obligations.

Typically, bankruptcy serves two functions:

It provides the debtor with a clean financial slate by discharging their debts.

It provides the creditor a fair share of the money that the debtor can afford to repay.

As soon as a debtor files for bankruptcy, the court issues an automatic stay instructing creditors to cease all collection efforts immediately. Here are some benefits of registering for bankruptcy:

Discharges all the debts:

All of your unsecured debts will be discharged under Chapter 7 bankruptcy. To be released from debt, one must petition for bankruptcy. Additionally, it will put an end to creditor harassment and the associated financial stress.

Protection of property:

If a creditor sues a debtor and obtains a judgment, the next step is the execution of that judgment. During the execution of the judgment, the creditor forces the sale of property and garnishes bank accounts. In this case, when the debtor files for bankruptcy, the court promptly ceases operations and safeguards the debtor's property. The total quantity of property that can be protected over time depends on the exemptions permitted by the bankruptcy code.

Automatic pause:

The court will automatically halt all creditor actions, including litigation, garnishments, repossession, foreclosure, short sales, and evictions, once the debtor files for bankruptcy. A creditor is prohibited from initiating or continuing a lawsuit against a debtor who has filed for bankruptcy. When a creditor garnishes a debtor's wages and the debtor cannot afford basic living expenses, registering for bankruptcy immediately stops wage garnishment. A bankruptcy filing can also prevent the foreclosure of a home.

Elimination or alteration of secured obligations:

During bankruptcy, a debtor has multiple options for handling secured obligations. In rare instances, judgment liens placed against a residence can also be removed. With the assistance of chapter 13 bankruptcy, one can reorganize their payment of secured debts, and the court grants time to repay the debt without default or loss of property, such as a residence or car.

Due to the complexity of the bankruptcy procedure, it is necessary to consult with an attorney. A lawyer is familiar with the intricacies of filing for bankruptcy and can also recommend the appropriate chapter of bankruptcy. Additionally, the attorney can assist with the extensive documentation required to file for bankruptcy.""

" - https://www.affordablecebu.com/

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"Filing Bankruptcy - Know About The Advantages" was written by Mary under the Finance / Wealth category. It has been read 70 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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