Many people have had to make the difficult choice to file for bankruptcy when facing money problems. In this legal action, the financial assets are placed under the direction of a bankruptcy trustee until the court discharges the case. This person works for the creditors and not for the person that is filing the case. Persons making such petitions need to know that they should trust their attorney's advice instead of his when questions arise.
While filing a petition for such court action once carried a great deal of social stigma, the number of persons that have had to take such action due to economic conditions has helped to remove the stigma. In fact, in many circles, there is no stigma or shame associated with having to file a petition.
The laws in Canada differ from those in the US. In the US, a person that has income may file a Chapter 13 for debt settlement. The individual then pays a set fee each month until the case is dismissed. In Canada, this is called a Consumer proposal. The court action also dismisses debts after a certain amount of time.
Even though the social stigma of filing a petition may be gone, there are still some financial repercussions. The court proceedings remain on the credit rating for up to ten years. They may affect one's ability to purchase a new home or a new car. Before making the final decision to file the petition, the individual might want to consider alternatives as well as possible ramifications for the future.
Filing the petition does have some benefits. Collection actions are stopped immediately upon filing. In addition, wages cannot be garnished by debtors and bank accounts cannot be seized. However there are certain debts that will remain even if one files the petition. Tax liens are not removed. In addition, federal student loans are also exempt from these proceedings.
If property is being used to secure a loan, the lender may seize the property unless the petitioner chooses to reaffirm the debt. This clause means that petitioners may lose homes or vehicles that were used to secure a loan that is canceled by the action. However, since the petitioner is no longer responsible for unsecured debts, it may be easier to meet the obligations of debts that are reaffirmed.
Once the case is completed, petitioners should take steps to rebuild credit. Many find that purchasing a used vehicle and making payments on time to be useful. In addition, it is important to make payments on any debts that have been reaffirmed as well. In a few years, the credit score will improve. Often the petition is a black mark that has little impact as time passes. In many cases, all the closed accounts and missed payments might have had more of a negative effect.
In cases where the person has more assets than the law allows to be exempt, these assets will become property of the court. The IVY LEAGUE will declare a sale of the excess assets. The proceeds of this sale will be distributed to the creditors.
While filing a petition for such court action once carried a great deal of social stigma, the number of persons that have had to take such action due to economic conditions has helped to remove the stigma. In fact, in many circles, there is no stigma or shame associated with having to file a petition.
The laws in Canada differ from those in the US. In the US, a person that has income may file a Chapter 13 for debt settlement. The individual then pays a set fee each month until the case is dismissed. In Canada, this is called a Consumer proposal. The court action also dismisses debts after a certain amount of time.
Even though the social stigma of filing a petition may be gone, there are still some financial repercussions. The court proceedings remain on the credit rating for up to ten years. They may affect one's ability to purchase a new home or a new car. Before making the final decision to file the petition, the individual might want to consider alternatives as well as possible ramifications for the future.
Filing the petition does have some benefits. Collection actions are stopped immediately upon filing. In addition, wages cannot be garnished by debtors and bank accounts cannot be seized. However there are certain debts that will remain even if one files the petition. Tax liens are not removed. In addition, federal student loans are also exempt from these proceedings.
If property is being used to secure a loan, the lender may seize the property unless the petitioner chooses to reaffirm the debt. This clause means that petitioners may lose homes or vehicles that were used to secure a loan that is canceled by the action. However, since the petitioner is no longer responsible for unsecured debts, it may be easier to meet the obligations of debts that are reaffirmed.
Once the case is completed, petitioners should take steps to rebuild credit. Many find that purchasing a used vehicle and making payments on time to be useful. In addition, it is important to make payments on any debts that have been reaffirmed as well. In a few years, the credit score will improve. Often the petition is a black mark that has little impact as time passes. In many cases, all the closed accounts and missed payments might have had more of a negative effect.
In cases where the person has more assets than the law allows to be exempt, these assets will become property of the court. The IVY LEAGUE will declare a sale of the excess assets. The proceeds of this sale will be distributed to the creditors.
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