How Bankruptcy Works.

How Bankruptcy Works

How Bankruptcy Works

The most important aspect of how bankruptcy works is that upon filing bankruptcy a number of immediate benefits go into effect:

  • A Stay of Proceeding goes into effect as soon as the documents are filed, which prevents creditors from taking any collection action to recover  the debt;
  • Collection calls stop;
  • Interest on the debt stops accruing;
  • Any garnishees in place or contemplated are stopped.

In the vast majority of cases a person is out of bankruptcy in 9 months, has all eligible debt erased and keeps all his assets.   The minimum cost is $1,800, which can be paid at the rate of $200 a month for 9 months.

A bankruptcy is quite easy to put in place.   If a person is in imminent danger of having his wages garnisheed a bankruptcy can be put in place in a day and the wage garnishee stopped.

Steps on How Bankruptcy Works in a non Emergency:

  1. Get some information on bankruptcy and consumer proposals so you understand the concepts;
  2. Call a trustee to make a Free, no obligation confidential consultation;
  3. The trustee will review your financial information and suggest some options for you to consider.  This is your opportunity to ask your questions;
  4. Think over the information you received and when you are ready call the trustee to set a time for you to sign the bankruptcy documents;
  5. The trustee will mail out the bankruptcy information to your creditors.   If any creditors contact you for payment tell them you filed bankruptcy and refer them to your trustee;
  6. The creditors can request a creditors’ meeting but seldom do;
  7. Each month you must send the trustee a statement of your income and expenses and the required payment;
  8. You are required to take two counselling sessions during the first seven months of the bankruptcy;
  9. At the eighth month the trustee will write a report on how you conducted yourself before and while in bankruptcy and make a recommendation on your discharge;
  10. The trustee will send you a Certificate of Discharge.   Keep this important document is a safe place.  If any former creditors contact you for payment showing them this document will prove you do not owe the money;
  11. The vast majority of people are out bankruptcy in nine months.

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Bankruptcy Essentials Book.

Bankruptcy Essentials Book

This book is a “MUST HAVE” for anyone considering bankruptcy or a proposal or considering using a credit counsellor.

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