The Bankruptcy Process Explained The bankruptcy process is the way in which an individual or company can become insolvent and be relieved of their debts. The process usually starts with the filing of a petition to commence a bankruptcy proceeding, which is done either voluntarily by the debtor or involuntarily by creditors. Once the petition has been filed, it will be examined by a court officer called a clerk who will make sure that all the required information has been provided and that there are no irregularities in what has been submitted. If everything is satisfactory, then the petition will be granted and given an appropriate case number. This number will identify this particular bankruptcy proceeding for future reference purposes.

How does it work?

The Bankruptcy process is a court procedure that helps people who have too much debt and cannot pay their bills. In the United States, bankruptcy is governed by federal law. Chapter 7 is a liquidation bankruptcy wherein some of your property will be sold to pay off part of the debt. In Chapter 11, you reorganize your debts and make monthly payments over a period of three to five years. In Canada, there are two types of bankruptcies: Consumer Proposal or Consumer Bankruptcy Act. The consumer proposal offers a repayment plan to creditors while the consumer bankruptcy act does not provide for any repayment plan but instead exempts certain assets from seizure by creditors.

Who can file for bankruptcy?

Bankruptcy is a legal process in which an individual or company can be relieved of the obligation to repay debts. Individuals and companies are eligible for bankruptcy relief under either Chapter 7 or Chapter 11 of the United States Bankruptcy Code. Chapter 7 bankruptcy is a process in which an individual’s nonexempt assets are liquidated to pay off as much debt as possible, with any remaining balance discharged by the bankruptcy court. Those who qualify for Chapter 7 bankruptcy relief must pass certain eligibility requirements before they will be allowed to file for this type of relief. 


What are the benefits of filing for bankruptcy?

Filing for bankruptcy is a process that can help you to get rid of your debt. There are two types of bankruptcy, Chapter 7 and Chapter 13. If you have a lot of debts but are able to pay off some or all of them over time, then you might qualify for Chapter 13 bankruptcy. This type allows you to repay your debts in installments over three to five years. However, if the court determines that your income is too low and/or your assets are not enough to repay at least part of what you owe, then it may dismiss the case without filing it. If there is no reasonable possibility for repayment, then the court will likely rule in favor of Chapter 7 bankruptcy. 


What Happens After Filing for Bankruptcy?

The bankruptcy process is a complicated one. But, it can be broken down into two main parts: filing for bankruptcy and the aftermath of the filing. After filing for bankruptcy, there are many things that need to happen in order to secure your future financial stability. This includes making payments to creditors, getting rid of any assets that you want to keep, and taking an assessment test with a trustee. The trustee will decide what type of bankruptcy you should file under (Chapter 7 or Chapter 11) based on your income level and other factors.