The bankruptcy procedure often starts with a debtor filing a bankruptcy petition.

A group of creditors can give a joint petition if the sum is huge. The creditor must prove that the debtor has been unable to pay the debts taken and did not honor the treaty done by the creditor and the debtor.

The judge or the court will decide if the petition is to be proceeded or not. If the order for bankruptcy is given, an official will be appointed to take charge of the debtor’s property.

Within the next 21 days, the debtor has to submit a bankruptcy order to the appointed court official. With the order, the Official Receiver will take a decision on calling a meeting of creditors to share them about the statements of the debtors. All the property of the debtor will be under the trustee and only a few properties will be exempted from the bankruptcy. Then the valuable items can be sold.

The official in charge of the debtor’s properties will have to sell the properties, the sold amount will then be used to clear the debts of the debtor.

There is a special case for secured debts as secured debts are not tied to the trustee for the debts. If the sale is unable to produce sufficient funds for covering the debt, then the creditor has the option to claim the balance amount as an unsecured creditor. On the other hand, if the sale of the debtor’s property is more than the debts owe combined then the repayment will be distributed equally. You may want to ask: Who is this Trustee? The Trustee is just an officer appointed by the court. The Trustee is also known as the bankruptcy administrator as he holds responsibilities of supervising the filed cases and activities between the creditors and the debtor.

Make sure to take counseling from an approved agency before filing for bankruptcy. They will tell you about the repayment plans and other procedures that involves in the bankruptcy. All of us should be well-versed in the laws of bankruptcy and the fees involved so that it can help when the need arises.

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