Bankruptcy Court
Bankruptcy Court
Today, so many people are going to court to file a financial distress petition. Insolvency is caused by large medical bills, credit card debt, student loans or inability to pay for your mortgage. There are several options that debtors could opt for before they settle for the petition.
Developing a repayment plan in which the debtor proposes a way of paying them is a viable option. In case this does not work, the debtor goes to the bankruptcy court and files a financial distress petition. In the bankruptcy court, the debtor has to take recent copies of their financial statements to show the level of their assets, recent copies of letters from creditors seeking payments and also a list of assets under the debtors name. The debtor will also be required to submit a copy of his monthly expenses.
Bankruptcy courts are institutions in which honest individuals can sort out their financial crisis in a clean manner. This way, such individuals can rebuild their financial lives by relieving them of most of their debts and helping them to facilitate repayments to their creditors. These are also channels in which the debtor’s life can continue even when they are in financial crisis. These institutions help to protect the debtor from the cruelty of some creditors.
Insolvency courts will encourage the debtor to choose the best chapter under which to file their case. They will therefore be encouraged to file under chapter 13 which gives the debtor some protection for some period of time. These institutions will also refer the debtor to counseling agencies for financial education.
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