Personal Bankruptcy – What You Need to Know
Personal bankruptcy is a way for people to get rid of their debts when they can no longer pay them. You may have heard that someone is "broke." This means that they no longer have enough money to pay their bills or loans. This can happen to anyone - due to unemployment, illness or excessive spending. But there is a way out: personal bankruptcy.
What is personal bankruptcy?
Personal bankruptcy is when someone who has a lot of debt goes to court and says, "I can't pay all this anymore." The court then helps to make a plan to pay off the debt over a period of years. At the end of that period, any remaining debt is forgiven - that is, you don't have to pay it anymore. This means the person is then debt-free.
Who can declare personal bankruptcy?
Anyone who has a lot of debt and can no longer pay it back can declare personal bankruptcy. It doesn't matter whether you have a family, are self-employed or live alone - if you no longer know how to pay your bills, this can be a solution. The important thing is that you are honest and really can't pay anything anymore. It is not allowed to declare personal bankruptcy if you deliberately hide your money or do not declare everything.
How does personal bankruptcy work?
Personal insolvency is a process that involves several steps. Don't worry, it sounds more complicated than it is, and the Debtors' Insolvency Center eV will help you with every step:
- The application: First, you file an application with the court. This means that you tell the court that you want to declare personal bankruptcy. You have to fill out a lot of paperwork so that the court knows how much debt you have and why you can no longer pay it.
- The creditors: Your creditors – the people or companies you owe money to – will be informed by the court. They can then tell you how much money you still owe them.
- The trustee: A trustee is appointed by the court. This is a person who looks at how much money you earn and how much you need to live on. Anything that is left over is used to pay off your debts.
- The good conduct phase: This phase lasts three years. During this time, you must do everything you can to pay your debts honestly. You are not allowed to take on any new debts and you must cooperate with the trustee. For example, you must tell him if you earn more or have a new job.
- Debt-free at the end: If you have done everything right during these three years, you can be debt-free at the end. The court will then grant you what is known as "residual debt relief". This means that all debts you still have will disappear. You no longer have to pay them back.
How does the Debtor Insolvency Center eV help?
The Debtor Insolvency Center eV in Leinfelden-Echterdingen is there for you if you need help. They have many years of experience and know exactly what to do. They will help you to submit the application correctly and are there for you the whole time. Even if you don't know how to start, you can just make an appointment and they will explain everything to you.
What are you allowed to do during personal bankruptcy?
Even during bankruptcy, you are allowed to lead a normal life. You are allowed to work, buy things you need and provide for your family. The only thing that will be done is to make sure that you do not take on any new debts and that you pay back as much of your old debts as possible. But you do not have to be afraid - no one is taking your home or your personal belongings away from you.
What happens after personal bankruptcy?
After three years, you've done it! You're debt-free and can start again. That can be a great feeling because you're no longer crushed by your debts. Your life becomes easier and you can look to the future without worries again.
Conclusion
Personal bankruptcy is not an easy path, but it is an option if you can no longer get out of the debt trap. With the help of the Debtor-Insolvency-Centrum eV in Leinfelden-Echterdingen, you can take this path and be debt-free after three years. It is important to seek help early on, before the debts become too large. So do not hesitate to contact us and arrange a free consultation.
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