The bankruptcy procedure usually starts with a bankruptcy petition that is raised by the debtor or creditor.
A group of creditors can give a joint petition if the sum is higher. The creditor must prove that the debtor has been unable to pay the debts taken and did not honor the agreement signed by the creditor and the debtor.
After the raising of the petition, the court will decide if the it is OK to declare bankruptcy. If the order for bankruptcy is given, a court official, usually known as the trustee, will be assigned to the case.
The debtor has to submit the Official Receiver within 21 days of the making of a bankruptcy order the statement of affairs. With the order, the official will call for a meeting with both the debtor and the creditor. All the property of the debtor will be under the trustee and only a few properties will be exempted from the bankruptcy. All the unexempted properties will be sold.
The trustee in bankruptcy has the responsibility to convert the debtor’s properties into money, the sold amount will then be used to clear the debts of the debtor.
A secured creditor does not depend on the trustee for the repayment of the debts that are due to them. If the sale is unable to produce sufficient funds for covering the debt, these secured loan will be first in line when it comes to claiming via unsecured loan. 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. So who is this official appointed by the court? He is the Trustee. The Trustee is just an officer appointed by the court. Also known commonly as the bankruptcy administrator, he has power to process the entire case of bankruptcy and repayment.
All debtors who files for bankruptcy must go for credit counselling course. Do ensure that you attend the course from the court appointed one. They will tell you about the repayment plans and other procedures that involves in the bankruptcy. One should be updated with the bankruptcy laws and the fees that is present for each chapter of the bankruptcy.