Credit Debt Repair-can you be sued for credit card debts?

The bankruptcy procedure often begins with a debtor filing a bankruptcy petition.

A group of creditors can give a joint petition if the sum is higher. In filing the petition, the creditor must provide the proof that the debtor is not able to make repayments in order to get the petition into force.

The court now comes in picture and will determine whether to declare a bankruptcy or not. If the bankruptcy is cleared to be declared, an official will be appointed to take charge of the debtor’s property.

The debtor has to submit the Official Receiver within 21 days of the making of a bankruptcy order the statement of affairs. Once the order is received, the Official Receiver will take a decision on calling a meeting of creditors to share them about the statements of the debtors. All the property of the debtor will be under the trustee and the debtor will be given only the required essentials to assist in their trade and living. All the unexempted properties will be sold.

The official in charge of the debtor’s properties will have to sell the properties, proceeds from the sale will then be used to repay the debts owed.

There is a special case for secured debts as secured debts are not tied to the trustee for the debts. After the sale of the debtor’s property if that amount is not enough to clear the secure loan, then the creditor has the option to claim the balance amount as an unsecured creditor. On the other hand, if the sale of the debtor’s property is more than the debts owe combined then the repayment will be distributed equally. The Trustee is just an officer appointed by the court. The Trustee is also known as the bankruptcy administrator as he holds power to process the entire case of bankruptcy and repayment.

Make sure to take counseling from an approved agency before filing for bankruptcy. They will tell you about the repayment plans and other procedures that involves in the bankruptcy. Knowing a little more about bankruptcy is important.

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This entry was posted on Friday, June 19th, 2009 at 7:06 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.