What does the term personal bankruptcy mean?

Personal bankruptcy is often regarded as a debt management instrument of last resort due to the long-term and far-reaching consequences. Bankruptcy remains on your credit report for ten years, making it difficult to obtain credit, purchase a home, obtain life insurance, or even find work. Find out more about the bankruptcy process.

Bankruptcy is a legal procedure that allows those who are unable to pay their debts to start again. Individuals who follow the bankruptcy laws are granted a discharge, or court decree, stating that they are not responsible for debt collection Dubai. Personal bankruptcy can be divided into two categories:

To keep the property,  such as a mortgaged house or automobile, that you could otherwise lose if you have a regular income and unrestricted debt. The court adopts a repayment plan in Chapter 13 that permits you to pay off a default over three to five years rather than surrendering any property.

Chapter 7 bankruptcies,

Sometimes known as straight bankruptcy, entails the liquidation of all non-exempt assets. A court-appointed authority (trustee) may sell some property or give it over to creditors.

NOTE: You can only get a debt discharge under Chapter 7 bankruptcy once every six years.

Both types of bankruptcy can help you get rid of unsecured obligations and put an end to foreclosures, repossessions, garnishments, utility shut-offs, and debt collection in UAE. Both offer exclusions that allow you to keep certain assets, however, the amount of the exemption varies.

Child support, alimony, fines, taxes, and other school debts are not normally erased by personal bankruptcy. Furthermore, unless you have a viable plan to repay your debts under Chapter 13, bankruptcy does not allow you to preserve property if your creditor has an unpaid mortgage or lien on it.

Being burdened by debt can be daunting and puts you in a vulnerable situation. And declaring bankruptcy is a drastic measure that should be considered carefully. A record number of people have filed for bankruptcy in the previous several years.