Bankruptcy is legal state that implies that you are no longer in a position to pay your creditors. It is mostly a situation whereby one is overwhelmed by debt. So much is the pressure that one ends up declaring their incapacitation with the aim of avoiding any other harassment from the creditors.
Sometimes, due to reluctance and fear, you will find that some debtors will be sued by their creditors if they default payment. This pushes them into involuntary bankruptcy. As a debtor, you can file for a petition against that of the creditors. For it to be accepted though, you have to demonstrate that you were sued against your will and go forth to show how you plan to settle the bill. If your petition goes through, you may file a suit either under chapter 7 or 13. The former dictates that your assets be liquidated and the proceeds divided among your key creditors.
Chapter 13 on the other hand is somewhat more of a repayment plan stipulated through a budget; it allows you to make monthly installments to your creditors till your bills are cleared. You are given up to five years to repay all of your debts.
What is required of you as you file for bankruptcy is your financial statement which should reflect your true financial standing as at the time of filing the petition. You need to present a list of all your creditors with whom you hold both secured and unsecured loans. These are what will be used to determine the type of filing that suits you best.
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- Unsecured Loans ? Feasible Option For Non Homeowners
Source: http://www.toppageresourcelisting.info/finance/how-to-deal-with-bankruptcy-as-a-debtor/
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