Unfortunately, the bankruptcy process is very stressful, but it is common. Every year 40,000 to 60,000 cases of bankruptcy are filed to resolve their debts.
As it is a complicated and serious process, you must seek professional help for early financial difficulties. By doing so, you can avoid inappropriate behaviour and actions.
Bankruptcy is an appropriate solution when an individual cannot resolve their financial difficulty by other means. Once you declare bankruptcy, it terminates all kinds of unsecured debts of the individual, and a fresh start is given upon the discharge.
If a bankrupt does not complete all their duties in the process or an offence is committed by the bankrupt, the ability to discharge is affected.
So, here is the list of inappropriate behaviour you should avoid while filing a Bankruptcy in Kelowna, BC.
1- Making preferential payments
With the Bankruptcy and Insolvency Act (BIA), unsecured creditors have distributed a fair share of funds. This is the purpose of BIA.
This means you should not pay ahead of your credit card debt if you owe any personal loan to your acquaintances. It is considered a preferential payment.
If any such kind of payment is processed in the five years of bankruptcy, it must be disclosed to the Licensed Insolvency Trustee (LIT). This will affect the discharge of the bankruptcy. Thus, avoid making preferential payments during your bankruptcy Kelowna.
2- Not disclosing assets & income to the LIT
Some bankrupts might try to hide their assets and income from the LIT. They intend that after the bankruptcy clears the debt dissolving the assets, the bankrupt can still enjoy the luxury of their non-disclosed assets. Thus, they can avoid paying from their income or other assets.
However, the creditors have an entitlement to these funds.
In the event of discharge, if the non-disclosed assets or incomes are discovered in the event of discharge, the court will oppose or review your bankruptcy discharge. This can also result in a criminal offence.
3- Selling or transferring assets
If you are selling, transferring, or disposing of assets before bankruptcy, it must be disclosed to the LIT. Also, if the assets are sold or transferred for less than the market value, it might be considered an undervalue transfer.
Such transactions may be attacked by the LIT and considered void. This will result in the asset or fund being realized by the Trustee.
Avoid doing such a transaction that can affect your bankruptcy Kelowna.
4- Going further into debt
If you realise you are insolvent or facing financial crises, going further into debt or borrowing more is inappropriate. One should not take more debt if they do not intend to repay the loan.
Your LIT will enquire all about your credit use leading up to bankruptcy. If the borrowed funds appear inappropriate, it may affect your discharge chances.
Last Say
It would help if you avoided such behaviour while dealing with bankruptcy in Kelowna.
For your case of bankruptcy in Kelowna, Mike Wright & Associates will help deal with your case. We offer you attorney pieces of advice and services that are of a professional level.
Shane Taylor is the author of this article. To know more about Mike Wright & Associates Inc. in Kelowna please visit our website:debtfreebc.ca