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Voluntary Bankruptcy

Candlefocus Editor
Voluntary bankruptcy is the most common type of bankruptcy. In this bankruptcy proceeding, a debtor decides to file for bankruptcy because they are unable to satisfy their debt. Voluntary bankruptcies occur when a debtor has tried and failed to negotiate a repayment plan with their creditors on their own. As a result, they voluntarily declare bankruptcy to protect their assets, avoid further debt collection efforts, and reduce the amount of debt that they owe.

The first step in voluntarily filing for bankruptcy is to consult a qualified attorney who specializes in this type of law. The attorney will explain the different types of bankruptcies, their potential effects, and the likely legal costs involved. The attorney will also assist the debtor in completing the necessary paperwork and filing the correct forms with the court system. This is done to start the bankruptcy process.

After filing, the debtor is required to attend credit counseling, where a professional will help them understand their current financial situation. This allows the debtor to gain a better understanding of their current debt, so they can make informed decisions about their financial future.

It is important to note that filing for voluntary bankruptcy does not necessarily release the debtor from responsibility for paying certain debts. In some cases, a debtor will still be held responsible for paying a part of their debt. In some cases, creditors may file legal actions against the debtor, depending on the laws of the state. Nonetheless, voluntary bankruptcy can provide debtors with an opportunity to reduce some of their debt and make more manageable payments.

In conclusion, voluntary bankruptcy is a process that allows debtors to take control of their finances. By filing for voluntary bankruptcy and seeking the help of a qualified attorney, debtors can gain knowledge and make informed decisions to help them manage their debt in a better way.

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