Stopping a Bankruptcy Proceeding
Bad Debt Consolidation by splinder
Filed under Bankruptcy
Bankruptcy is a legal solution to your problem of overwhelming debt. Your creditors can file an involuntary petition and force you or your enterprise to go out of business. The rules for involuntary petition are contained in Section 303 of the US Bankruptcy Code. Once the petition is filed, the debtor has the chance to file a motion and stop bankruptcy processes.[br]
Stop Bankruptcy: Steps
Some steps to stop a bankruptcy procedure include:
· A bankruptcy can be stopped if you negotiate with your creditors and chalk out a payment plan.
· If the debtor files the involuntary petition in a Bankruptcy Court outside the jurisdiction of your place of residence, you can move court and stop the proceedings.
· By changing the Chapter when your case cannot be ruled under Chapters 11 or 13 as specified in the petition. This rule only applies to farmers or individuals who qualify for Chapter 7. While this probably will not resolve the issue, you can stop bankruptcy from proceeding under an unfavorable chapter.
· Another way to stop a bankruptcy procedure is to show insufficient claim. Creditors can only file for involuntary petition if the claims against you are more than $10,000.
Stop Bankruptcy: Some Alternatives
While bankruptcy may be your last resort in terms of financial relief, there are some alternative measures you can implement to avoid bankruptcy:[br]
· Debt Consolidation: Debt consolidation reduces your monthly expenses and enables you to live within your means. In addition, you continue to make monthly payments. But caution should be maintained when you have taken a loan. Your home may be at risk of repossession if you fail to meet your monthly payment commitments.
· Debt Management: A Debt Management Plan (DMP) is an informal arrangement between you and your creditors, typically taking place in presence of a professional insolvency practitioner. According to this plan, you are required to pay off your debt through monthly payments over a period of 5 years, till your debt is paid off completely. A DMP does not usually reduce the amount of debt, the interest rate or other charges.
· Individual Voluntary Arrangement: Under the IVA, you can repay your debts by making monthly payments based on your income and assets, and it is usually possible to write off a large percentage of your debts. In addition, the IVA allows you to retain your assets and move on with life.