In accordance with the provisions of the Federal Laws, any individual or business may declare insolvency, in which case they will not be required to repay their loans and will receive legal relief. Nonetheless, this is not as simple as it appears.
Previously, if you lost your source of income and were unable to pay your loans, you could declare bankruptcy and receive relief because the government would forgive your debts, allowing you to re-establish your business or seek employment after a few years. It was a straightforward task.
Evidently, individuals began abusing the provisions of the law; consequently, the government was compelled to modify the rules and ensure that only those who genuinely required bankruptcy relief were granted assistance. Thus, the rule now operates differently.
An individual files a petition for bankruptcy, after which an independent evaluation of his assets and liabilities is conducted to determine whether he is eligible to file a particular form of bankruptcy.
Several chapters exist under the provisions of bankruptcy. The majority of cases occur between chapters 7 and 13, with Chapter 11 covering businesses. Once the proper chapter has been identified, you may file your documents and the remainder of the procedure will commence.
It is nearly impossible for a layperson to interpret the subtle differences between the provisions of the various chapters and determine his or her case due to the fact that each chapter contains a detailed description and a list of conditions applicable to bankruptcy. You would need to rely on bankruptcy attorneys for guidance and filing on your behalf. However, no individual stands to receive complete debt relief.
One must either pay a portion of the outstanding debt or devise an extended repayment plan. Your bankruptcy status will be reflected in all of your records and will have a lasting impact on your credit rating, making it difficult to obtain additional loans or credit cards because you will be deemed credit undesirable.
Be extremely cautious before filing for bankruptcy. Unless you have no other choice, filing for bankruptcy will not make your life simpler in the future. However, if you have no other means of acquiring funds, this is the only option available to you.""
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