Any organization or individual may petition for bankruptcy under federal law if they need relief from their debts. However, filing for bankruptcy is not as simple as it once was. In the past, anyone with significant debt could simply file for bankruptcy, have the government wipe out their debts, and then start over after a few years with a clean financial slate. It was that easy.
Obviously, this was before individuals began exploiting the system. Therefore, the government had to make some policy adjustments in order to protect those who genuinely required bankruptcy assistance. Here is how bankruptcy works currently.
Following the filing of a claim, the petitioner's assets and liabilities are evaluated. Based on this procedure, the type of bankruptcy they can petition for is then determined. The majority of people are unaware that there are multiple varieties of bankruptcy that can be filed. Chapters 7 and 13 are the most frequent, but businesses typically wind up in Chapter 11. After determining the legal chapter, a specific set of documents is initiated and the system is activated.
Each chapter is slightly different, and it is difficult to keep track of these subtle differences unless you have a bankruptcy attorney to consult. However, I am aware that not everyone will be eligible for complete bankruptcy relief. Some individuals will still be required to pay a portion of their debt or establish a payment plan for outstanding liabilities. I am also aware that a bankruptcy remains on your record for a much longer period of time, making it difficult to purchase a home, car, or any other expensive item.
In conclusion, it is not advisable to file for bankruptcy unless it is absolutely necessary. Nonetheless, if it is your last option, don't worry. The purpose of bankruptcy law is to protect you.
" - https://www.affordablecebu.com/
