What is personal bankruptcy?
According to the U.S. Constitution, if you no longer fulfill your obligations to creditors and debtors, you have the ability to exempt some or all of your debts. The primary type of personal bankruptcy applies to consumers. Bankruptcy may be expunged by the debtor in whole or in part. Due to bankruptcy, the debtor will repay all or part of the debt, depending on the payment plan.
Under the Bankruptcy Act, some or all of the debt can be canceled after a portion of the debt has been repaid with current assets.
What are liquid assets?
If you own it, you may have liquid assets. These are assets that can be converted quickly into cash (e.g. checking and savings). Some of your current assets must be transferred to the courts so that they can be distributed to creditors in part in debt This is a non-exempt asset. Assets that cannot be used to repay creditors are called tax-free assets. Your state has laws that stipulate which current assets are exempt from exemptions.
Non-exempt current assets After being distributed to this creditor, all remaining debt will be reimbursed. You are no longer liable for the debt that has been withdrawn. Creditors and third-party creditors may also attempt to recover their debts from you.
What are your requirements?
To qualify, you must pass an average test that proves that your income is less than the median income for your family size in your state.
In addition to passing the average test, you will need to obtain credit from an approved credit consultancy. You can visit an approved credit counseling agency on the Trustee Program website in the United States.
Repay all or part of the debt according to the 3-5 year repayment plan When you apply for personal bankruptcy, you submit a repayment plan to the court. After submitting the plan, you must start paying the court (who pays the creditors) even if your plan is not approved.
There’s a hearing to approve the payment plan in a few weeks. While creditors may dispute the payment, the judge has the final say. After your plan is approved, it will continue to be paid to the court. Upon completion of the payment plan, all remaining liabilities will be reimbursed. You will no longer be held liable for the debt that has been discharged.
“The U.S. bankruptcy law says it can’t exceed $922,975, and $307,675 in unsecured debt.”
a personal bankruptcy application
The personal bankruptcy law is so complicated that you’d better ask a lawyer for advice before filing for bankruptcy. This is the best way to ensure that your documents are complete and accurate.