What is Bankruptcy?
Bankruptcy is a legal process that allows a person to “clean the slate” and encourages them to work again. Bankruptcy laws are intended to protect debtors so that their creditors do not seize their income and property in their entirety.
In some cases, Bankruptcy erases or discharges debts; in others, filing for bankruptcy results in a payment plan.
Experts explain that the reasons are related to the decline in living standards and incomes of the population due to the pandemic crisis; if there is no way to pay off debts, there are several ways to solve the problem.
- This year, the country approved a law protecting the living wages on debtors’ accounts. Is it possible to write off all debts and not pay?
- The law is such that up to half of the salary or pension can be withheld for debts. It led to the fact that pensioners and the disabled were at risk of being left without the necessary means of subsistence. Now they have an actual threshold. Some people believe they have a loophole, and now they can’t pay their bills. But, alas, debts remain “hanging” for life and even pass by inheritance.
Looking a little into the long term, we understand that no one is going to forgive debts, and bailiffs will begin to more effectively use other enforcement tools contained in the Federal Law of October 2, 2007, No. 229 “On Enforcement Proceedings”
Is it safe Bankruptcy?
Bankruptcy is a fundamental tool for financial recovery. The MFC can be issued by a citizen whose total debt is from 50,000 to 500,000 rubles. If the amount is more significant, this is done only in court.
There are two ways to solve the problem:
- Debt restructuring. A person should have money “for life”: based on the cost of living for a citizen and his minor children. You can use it with a good “white” income, enough to return to the payment schedule for three years.
- Sale of property. “Write-off” of debts is preceded by the sale of various valuables: jewelry, luxury items; cars; real estate. You will not take your only housing, clothes, and household items away.
However, you should note that all situations are individual, and it is necessary to analyze all problems in detail. In our practice, ways have already been developed to minimize financial and property losses and avoid them.
Cons and pros of Bankruptcy
Pros:
- You are no longer charged interest, penalties, and fines.
- Creditors and collectors do not call.
- You can count on “payment” holidays – from 4 to 12 months.
Cons:
- Lenders learn about valuable property and transactions made in recent years.
- If you want to take a loan within five years after completing the procedures, you will have to report that you went through the bankruptcy procedure.
- You cannot spend more than 50,000 rubles without the consent of your financial manager.
- Can travel abroad be closed while paying off debts?
- The court may impose a travel ban for the duration of the property sale (from 3 to 6 months). In other cases, the debtor enjoys the right to free movement.
All enforcement proceedings have been completed, and travel abroad has been opened. At the same time, one should not forget that, by Art. 67 of the Federal Law of 02.10.2007 No. 229 “On Enforcement Proceedings,” the bailiff has the right to issue a ruling on a temporary restriction on the debtor’s departure from the country. In practice, it is removed only at the end of enforcement proceedings. When a citizen is declared bankrupt by a court, all enforcement proceedings are subject to termination. Thus, if the court has not issued a judicial act restricting the right to travel abroad, you see a favorable scenario.
Can failure hide your career?
An insolvent citizen for five years does not have the right to occupy leadership positions “with the right of the first signature.” Otherwise, there are no restrictions.
Why is it better to hire a lawyer?
Obtaining insolvent status is a lengthy process consisting of several stages. Not all citizens know the laws and legal nuances thoroughly, and the expert will take care of himself and represent your side in all disputes.How can Bankruptcy help me?
Bankruptcy can erase or “discharge” the consumer of most of their debts. The legal obligation to pay such debts disappears, and creditors no longer file lawsuits or demand payment. Bankruptcy can even prevent wage garnishment.
What debts can I discharge?
Bankruptcy can discharge most debts, such as credit cards, phone or utility bills, and medical bills.
However, Bankruptcy may not discharge all debts.
The following debts CAN NOT be discharged in Bankruptcy:
- Student loans
- Children’s pensions
- Alimony
- Most taxes
- Debts resulting from fraud (for example, if you were untrue on your credit card application)
- Debts resulting from “willful or malicious perjury” (for example, a drunk driving ticket)
Will I have to sell my property to pay my debts?
Most persons who file for Bankruptcy can keep most, if not all, of their personal property, except if they own something precious, like a diamond ring or a high-priced fur coat.
If you live in DC, your home is protected if you’re current on your mortgage payments, even if you haven’t filed for Bankruptcy.
Most people can keep their car if they are current on the vehicle account.
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