When planning to declare bankruptcy Calgary residents should do a little bit of research to familiarize themselves with this debt settlement option. This will enable them to prepare well for the proceedings, and the possible effects of becoming bankrupt. While the internet may have a lot of information about the different types of bankruptcies, only a qualified attorney can offer accurate and reliable information. Therefore, debtors who are considering this option should always hire qualified attorneys to help them out.
There is one major disadvantage of bankruptcies. After the court declares a person bankrupt, his or her credit score will drop significantly. The worst thing about it is that the credit score will not increase any time soon. In fact, it may take a person up to 7 years to get rid of the bankruptcy entry from his or her credit report. This can be a major disadvantage for anyone who wishes to grow financially with the help of low interest loans.
There are several categories of debts that cannot be settled through bankruptcy. Divorcees will still be required to continue paying spousal support as well as child support payments as usual. Student loans will still need to be paid regardless of the change of status. Knowing all these beforehand is important, and a qualified attorney is the right person to tell you all these.
Chapters thirteen, eleven and seven are the most popular types of bankruptcies. Different types of debtors can use these chapters to settle their debts. Institutions, corporations, small businesses and individuals are examples of taxpayers who can use these options. A lawyer can help debtors to choose the most suitable type of bankruptcy.
Consumers who have personal debts like mortgage loans, credit card debts, utility bills and car loans among other types of debts can choose between chapters 7 and 13 depending on their income. Those who do not have a reliable income source only qualify for the chapter 7. Those who have stable jobs or businesses can use the chapter 13. Businesses that have bad debts that have become unmanageable can use the chapter 11. Only profitable businesses may qualify for this option.
During the proceedings for chapters 11 and 13, debtors are required to draft a plan to settle their outstanding debts. The proposed plan should be sustainable, in that the monthly income of the debtor must be able to cover the monthly installments. One major advantage of these two options is that debtors continue living their lives and owning their assets, but without the unnecessary phone calls and emails from debt collectors, utility companies, mortgage firms and other creditors. The proceedings for chapters 7 and 13 bankruptcies normally require a trustee.
When a debtor defaults, or fails to honor the terms of the repayment plan proposed under the chapter eleven or chapter 13 bankruptcies, the court will automatically convert the proceedings into liquidation. Debtors should therefore know the consequences of failing to follow the terms of their repayment plans so as to avoid liquidation.
When looking for more information about bankruptcy Calgary residents should always consult with experts in the fields. Anyone who meets the minimum requirements for the different types of bankruptcies can apply for this type of debt help. The trustee together with the relevant court will however put the finances of the petitioner to ensure that there are no discrepancies in the case.
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