Applying for Bankruptcy
If you’re looking for information regarding bankruptcy, what it entails and how to go about applying for it, chances are you find yourself in a very difficult financial situation and can’t find a way to pay back your debts, which is why you’re filing for bankruptcy.
What exactly is bankruptcy?
It entails a process of having all your existing debts written off. Bankruptcy isn’t considered a valid option if you have equity in your home, along with other assets that can be of enough value to either reduce or pay off your debt completely.
Assets can be anything that is worth a lot of money. Think an extra property, cars, any other vehicles, shares, etc.
How to Apply for Bankruptcy
Before applying for bankruptcy, you need to know exactly what it entails, as well as be aware of the larger effect it could have on you, especially in the future.
Before filing for bankruptcy, you must first consult with a debt advisor on whether your debt can be managed, instead of resorting to filing for bankruptcy.
The first thing you’ll have to do after you’ve decided bankruptcy is the only option you’re left with is to fill out an application for it. The application can generally be found online on your local government website for your convenience, rather than having to go to a governmental office to fill out paperwork.
When filing for bankruptcy, you also don’t have to go to court. Upon completing the form online, you submit it, after which it gets sent to debt professional that makes a decision based on the information you’ve provided them with. This decision is referred to as an adjudicator.
Are There Fees Involved?
Yes. You have to pay a fee of around R5000 or more to file for bankruptcy. After you’ve paid, you cannot cancel it within two weeks of your submission as this will allow them to keep your deposit.
In most cases, people filing for bankruptcy cannot afford this fee. There is, however, many charities that will be able to support your application of filing for bankruptcy.
After the order has been made and processed, an Official Receiver will reach out to you to conclude how much money you’re able to pay your creditors by assessing the worth of your assets.
After the assessment, the Insolvency Service will refer a trustee to manage your bankruptcy.
If you do not have enough assets to pay your creditors back, you should set agreements in place to be sure to keep what you have. The trustee assigned to your case will set up a budget for you to be able to pay back whatever you can, which can last up to a few years. If the total amount of your debt cannot be paid back after a year, it will be written off.
Get help with your debt today! Credit Matters can help you with debt counselling and to bring your debt down.