Bankruptcy FAQ n2

Bankruptcy is a period of constant pressure and regulations and it is wise that we get all our clarifications resolved so as to ensure that there is no hiccups and hassles in the process. It is very common that we encounter doubts in the process of bankruptcy with regards to the procedure, frequency and other details. The below are a set of frequently asked questions regarding bankruptcy and the various nuances involved in it. Read on to understand the process better and to ensure a smooth completion.

1. How frequent can I file bankruptcy?
A: Bankruptcy is your declaration stating your inability to pay off debts and this though write-off your present debts affects your future a lot. The effects of bankruptcy extend to your credit rating and future loan applications. It can affect your future housing rentals and at times even your job applications. Hence think before you file your bankruptcy. You can always opt for other options of payment or negotiations with your creditors instead before choosing on bankruptcy. In case filing bankruptcy is your only wise option, you can choose to file by Chapter 7 or by Chapter 13. The frequency of filing as per Chapter 7 is 8 years from your last Chapter 7 filing and 6 years from a last Chapter 13 filing. In cases of Chapter 13 filing, you can do it 4 years after your last Chapter 7 filing and 2 years after your last Chapter 13 filing.

2. What do I need and how to proceed to begin the bankruptcy processes?
A: For declaring bankruptcy you need to file a petition in the court and on approval of the petition, the court appoints an official receiver to take over your case and work on it. Hence the first step towards initiation of the bankruptcy process is to file the petition. There is a certain formality involved in filing of the petition which includes submitting required forms and documents and paying the court fees. You can obtain the petition form and fill in the list of your fill your debts till date and also all details of asses you possess. You will also need to file in your financial affair statement and submit it along with the petition.

3. Is there any minimum amount of debt required to file bankruptcy?
A: There is no minimum amount of debt that is required for filing bankruptcy, but you should always consider before taking the decision. Bankruptcy affects your future credit history and loan taking capacity and also leaves a strain on your assets and reputation. Hence it is wise that bankruptcy is chosen as the last resort and other options are considered first. You can consider arranging on an individual basis with the creditors about a delayed payment or for a reduced amount. Also if your asset balance is very less compared to your loans, there is no point in declaring bankruptcy as your creditors will not benefit from it.

4. What is meant by a joint petition in bankruptcy?
A: In general, individuals can file a petition stating their inability to pay the complete or majority of his loans. In case of married person, the individual and spouse can combine to file the bankruptcy petition and this is petition is a joint petition. The couple filing the joint petition is required to be married at the date of filing and hence unmarried, partnership or divorced people cannot file a joint petition. The process of filing is same as that of a normal petition with the same document and filing fees as the individual procedure requires. The couple file the same petition with the required forms and fees in the bankruptcy clerk’s office. The only difference between the joint and the individual petition is that in case of joint petition, both the debtors must sign the document, attest the information and attend all hearing and schedules involved in the bankruptcy process.

5. What will happen if I file for bankruptcy and my spouse does not?
A: Whether you are both filing bankruptcy or not, the one who does not file bankruptcy can be responsible for the other person’s bankruptcy debts. These aspects need to be taken into consideration while filing bankruptcy.

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