What Consumer bankruptcy EntailsAuthor: Peter Gitundu
It is important for anyone who is going through some form of financial hardships to be informed of some of the changes in the financial distress petition. This is especially important if you are considering going to court over the same. Anyone who has over $200,000 in personal tax debts which represents 75% of unsecured will have to pay them once he has filed a petition. Such debts will not be exempted. About the Author:
An automatic discharge will only be possible if the debtor can convince the court that they are not in a position to pay at all. These changes in the consumer bankruptcy will be in accordance to the provinces where such laws have been put. It is therefore important for the debtor to consult a lawyer if the province in which they are filing has such exemptions. It is important for the debtor to know that in the changes, the trustee will have no authority whatsoever to recommend the debtor to pay less than they are expected to.
The court will require that the debtor makes surplus income payments to the estate in accordance to the court representative rules. Under the new rules in the consumer bankruptcy, a debtor who is filing for the first time will be required to make payments for nine months. In case the surplus remains, the debtor will continue paying for a further twelve months or for a further period of time as the court will deem fit.
For second time filers, the law will require them to make payments within 24 months and in case any surplus remains, they will be required to pay for a further 12 months after which the court will give further orders on how any pending surplus will be paid.
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