An individual or a married couple who can’t repay a large amount of debt incurred for personal, family, or household purposes can file for personal bankruptcy Red Deer to get a fresh financial start. The court will issue an order called the automatic stay, which forbids the lender from contacting you. This order can prevent employers from deducting any amount from your paycheck. Or stop your property from being sold at auctions.
Once you file for personal bankruptcy red deer, all kinds of collective action should be stopped including wage garnishments, creditor letters, and calls, lawsuits aiming for financial reimbursement, vehicle repossessions, and foreclosures. However, the reprieve is only temporary because filing for personal bankruptcy won’t fix all financial problems. By calling our office and speaking to one of our insolvency trustee Red Deer experts they can help you out by answering any of your questions.
For example, a mortgage creditor can file a request to lift the order and continue with a lawsuit or foreclosure sale. The court will probably grant the request if the property doesn’t have equity that you can use to cover the payments you missed.
What Kind of Debt Does Personal Bankruptcy Cover?
You can file for personal bankruptcy to wipe out personal loans, credit card bills, gym memberships, medical bills, and utility bills. Just remember that it won’t eliminate all of your debts. If you have domestic support obligations like a child or spousal support. Filing for personal bankruptcy red deer won’t relieve you of this duty. Aside from this, personal bankruptcy doesn’t cover most back taxes, penalties, and fines that should be paid to the government and student loans.
2 Types of Personal Bankruptcy
You can file for either Chapter 13 or Chapter 7 bankruptcy. The chapter that suits you depends on the debts you owe, your assets, and your income. One of our insolvency trustee Red Deer staff can help you in determining what is the best filing for you to do.
• Chapter 7 Bankruptcy
When you file for Chapter 7 bankruptcy, you can use your liquid assets to repay some of your debts. And discharge part or all of your debts. Liquid assets pertain to assets that can be quickly and easily converted into cash. Assets that can’t be used to repay debts are known as exempt assets.
Non-exempt liquid assets or those that can be used to repay debts will be distributed by the court among the lenders as partial repayment of your debts. Your remaining debts will be wiped out after distributing your non-exempt liquid assets. You won’t be required to pay for debts discharged. Lenders can’t collect debts from you as well.
To qualify for this kind of bankruptcy, you have to take a means test to prove that you’re earning less than the median revenue for your family size in your region. You should also get credit counseling from a qualified credit counseling agency. Check the U.S. Trustee Program’s official website to see the credit counseling agencies they have approved. Failing the test means doesn’t qualify you to file for Chapter 7 bankruptcy.
• Chapter 13 Bankruptcy
When you file for Chapter 13 bankruptcy, you can repay some or all of your debts through a 3- to a 5-year repayment plan. You should start sending your payments to the court after submitting the repayment plan. They will be the ones to pay your lenders. You have to start making payments even if your repayment plan has not been approved.
A hearing will be held after a few weeks to approve your repayment plan. After the approval, you will continue sending payments to the court. Any remaining debt will be discharged once you have completed the repayment plan.
If you want to keep certain assets, it is best that you file for Chapter 13. You can’t file for this kind of bankruptcy if you have more than $307,675 unsecured debts and $922,975 secured debts. You’re also required to get credit counseling from a qualified credit counseling agency.
If you don’t know which chapter is suited for you, just call us, and we will assess your current situation. Consult with one of our insolvency Red Deer trustees today!