How to file Bankruptcy in Court

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If you are in a financial mess and your liabilities are too high as compared to your assets, filing for bankruptcy will act as a restart button. It will give an honest and burden-free start to your life as you will be relieved from all the debts. If you plan to file for bankruptcy, you'll need to consider these steps:

1. Organize your balance sheet: Bankruptcy is a legally-acquired status and one has to prove it in court. Court decisions are based on evidence and in this case evidence will be in the form of the assets and liabilities you hold.

2. Look up for a legal advisor: Talk to an expert advisor on this matter. Your advisor will study your balance sheet and explore the possibility of captivating the court case. The advisor will provide an insight on individual filing or joint filing in case you are married.

3. File a proceeding for bankrupt status: Ask your lawyer to file a petition under the Provincial Insolvency Act and fight the case in court. Once you win the case, you will be deemed bankrupt and will be relieved from continuous hounding of creditors.

What are the advantages of filing for bankruptcy?

Getting bankrupt is in no way a desirable state, but it is not the end of the road either. You may lose your self-confidence and sense of direction, but you can make a comeback with careful planning. There are a few advantages that come along with filing for bankruptcy:

Mental peace: Financial stress often pushes debtors to the wrong direction. Numerous cases of suicide and murder related to individuals' debt situation are reported commonly nowadays. By filing for bankruptcy, a debtor can avoid stress and harassment at the same time.

Opportunity to restart: Before filing for bankruptcy, debtors do not get enough time for planning their future since the focus remains on creditors. Remember, even will all your assets gone, you still possess your skills and intelligence. You can concentrate on your future plans once your debts are written off post-bankruptcy.

What are the disadvantages of filing for bankruptcy?

Financial distress caused by bankruptcy can disrupt your plans - both for the present and the future.

Here are discussed a few disadvantages of bankruptcy:

All your assets are going to be lost: All your assets are liquidated in case of bankruptcy. The amount obtained is simply drained out in settling creditors' claims. You are left empty-handed which makes a restart highly difficult.

Credibility goes for a toll: Once you file a suit for bankrupt status, the message is loud and clear that you are a defaulter. You lose credibility in the eyes of creditors. Lack of credibility makes it impossible for you to secure debt in the future.

Cost of filing bankruptcy: Filing for bankruptcy, a costly affair indeed, is the final nail in the coffin as you have to pay for fighting your case. It simply fuels the pain one is already going through.

Advocate Siddhant Sharma LawRato