Bankruptcy of individuals: main features
In this article you can find out what bankruptcy of an individual is and what features of this procedure can be highlighted. You can also read about bankruptcy registration and find out who it is for optimally suited.
Who is a bankrupt and what does it look like in practice?
The appearance of this concept in our country dates back to 2015, when the relevant law was adopted. Previously, it was suitable exclusively for legal entities. However, now individuals also have the opportunity to file for bankruptcy.
In essence, this procedure means getting rid of accumulated debts, which allows you to improve your financial situation. Registration is possible for those citizens who find themselves in a difficult situation and cannot fulfill financial obligations to the bank.
The law does not provide specific guidance on which situations relate to a difficult financial situation. A citizen must have justified reasons for the inability to pay cash payments within the established time frame.
How the bankruptcy procedure is carried out: main points
It is important to understand that bankruptcy is carried out in judicial procedure. To do this, you need to contact the arbitration court. This indicates that everything is official. After a court decision is made, debts are written off and the individual is declared bankrupt.
Types of debts that you can get rid of during bankruptcy proceedings:
- Alimony.
- Subsidies.
- Causing damage to the health of a third party.
- Causing damage to someone else’s property.
Like any procedure, bankruptcy has its pros and cons . The main advantages of the procedure include the opportunity to get rid of debt obligations to the bank, improve the financial situation, stop calls from collection services.
If we consider the negative aspects, we can note the blocking of the client’s accounts for the period of the procedure, as well as a long period. On average, the procedure lasts at least 6 months. During this period, the debtor must live on a subsistence minimum.
According to the law, a person can apply for debt forgiveness again only if 5 years have passed. At the same time, when contacting credit institutions, all information about bankruptcy will be available. Also, the person will not be able to work as a general director. In any case, there are many more advantages than disadvantages.