Credit Counseling and Bankruptcy

Bankruptcy is a lawful procedure through which individuals or other entities that are unable to pay outstanding debts to lenders may seek financial relief from a bankruptcy court or some other court ordered authority. In most jurisdictions, bankruptcy is voluntarily imposed on an individual by a bankruptcy court order, usually initiated by the bankrupted person. There are two main types of bankruptcy, debt-based and non-debt-based. Non-debt based bankruptcy is usually filed by individuals at their own volition, whereas debt-based bankruptcy is usually filed as a result of being forced into bankruptcy by the creditor.

When a person is declared bankrupt, he/she becomes unable to collect any more debts from any of his/her creditors, including the debt to the Insolvency Practitioner (IP). The Insolvency Practitioner is the official in charge of managing the bankruptcy assets of the individual. Creditors still have rights to pursue the debt that they still owe to the IP, although these rights are generally fewer than in normal situations.

If the debts of a bankrupt individual are discharged, what remains is the bankruptcy asset. These assets may be sold in order to pay debts, or to fund other projects, or to pay any other debts of the bankrupt individual. They are then closed and the proceeds distributed. There are two types of bankruptcy: debt-based and non-debt-based. The debt-based bankruptcy is the one recognized in Canada.

In the debt-based bankruptcy, there are two chapters that have different procedures. One chapter involves trustee proceedings, which involve a trustee’s sale of the assets of the borrower. Another chapter involves the commencement of a liquidation proceeding, during which the proceeds of the bankruptcy will be distributed among the creditors. Chapter two involves the discharge of the bankruptcy, and there are two chapters there: one for debts that have been discharged, and one for debts that remain unpaid. Chapter two does not end with the discharge of the bankruptcy proceedings.

If you are filing for bankruptcy based on chapter 13, it is important that you take time to fully understand the process. For example, filing chapter 13 involves a formal petition that is filed with the Federal bankruptcy court. After filing, the petition must be served personally or sent by certified mail to the individual’s last known address. You cannot file until the petition has been filed properly. Furthermore, the bankruptcy attorney is paid only if the petition is filed. If it is not filed, the bankruptcy attorney is not paid.

Because filing for bankruptcy can have such a profound negative impact on a person’s credit rating, the individual who owes money may seek help before the bankruptcy declaration. There is a procedure for declaring financial hardship, which is typically recommended when the individual is not able to pay even the minimum payment on a secured loan or has fallen on hard to pay debts such as credit card debt. The individual can use this procedure to reduce the amount of money they need to pay so that they can afford to pay their mortgage, rent, car payments, or credit card debt.

If the individual is unable to follow the procedures required under the bankruptcy law, they may still be able to qualify for assistance through the state department of motor vehicles. Under the state department of motor vehicles (DMV), drivers can receive car repair coupons and approved auto insurance discounts. The state DMV offers many financial services, including bankruptcy education. While the bankruptcy law does not allow for insurance discounts or car repair coupons, bankruptcy law does allow for bankruptcy protection of assets held by the individual.

To find out more about the benefits of credit counseling and other options, a consumer should contact a bankruptcy lawyer. This attorney can provide information on chapter 13 bankruptcy, as well as other consumer protection laws that may apply to the individual filing. Although no credit counseling service will have any legal authority in bankruptcy proceedings, they may be able to refer the client to an appropriate legal firm.