Bankruptcy is often an undesired situation in an individuals life. The laws set to oversee bankruptcy usually vary but often share some guidelines. There are several types of bankruptcy as dictated by the laws but there are two which are mostly associated with individuals. These are chapter 7 and chapter 13. However, sometimes some individuals may opt for chapter 11 bankruptcy.
Chapter 7 Bankruptcy
Chapter 7 is commonly preferred by individuals but also small businesses can use it. However, it is regarded as the harshest. You can also refer it as liquidation or straight bankruptcy.
Bankruptcy is only one choice for someone in debt that is serious there’s an alternative choice which individuals ought to know about specifically the consumer proposition.
Whereas in a bankruptcy your assets are assigned to a trustee (subject to exemptions) who subsequently liquidates them to pay your unsecured creditors, this really isn’t true for a consumer suggestion. The consumer proposition, under the Debts and Insolvency Act, is an offer to pay your lenders that are secured an established amount of money thereby avert insolvency and to extinguish your debts. This cash is paid interest free over a span of up to FIVE years. Continue reading →