Legal proceedings that are involved with person or businesses when they are not able to pay all of their debts in called Bankruptcy. It basically starts when the debtor files for a petition or when the petition is filed in place of the creditors. The properties and assets that belong to the debtor are evaluated, and they, in general, are used to repay the debt that is outstanding. Bankruptcy basically offers the person or the business the opportunity for starting fresh by canceling debts that are impossible to pay. When a person or business files for bankruptcy, it benefits the economy thereby giving the business opportunities to obtain the means to credits of the consumer and also provides the creditors with the solution of paying the debt. When the bankruptcy proceedings are completed successfully, the debtor is free from all the obligations of debt that had occurred before the person filed for bankruptcy.
Listed below are a few things that you need to know about Bankruptcy.
Going to the court
Going to the court may sound scary, but it is not that bad. A person has to go for one hearing known as the “meeting of creditors.” This hearing involves a round of questions and answers, and the person has to answer the questions asked by the creditors and the trustees.
The Mandatory Classes
There are these two classes that have to be taken during the process of bankruptcy.
(a) The Pre- Petition Class: This is generally taken to make sure that the person has actually exhausted all the credit avenues before bankruptcy.
(b) The Post- Petition Class: This is generally taken a right before the person’s bankruptcy is dismissed for counseling the person about managing money as well as debt, better in the future.
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