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Rules & regulations of personal bankruptcy in different countries

Involuntary bankruptcy

This means that the person you owe money to; the creditor, will be able to take you to court in order for them to claim back the same amount. However, depending on the country, there are different rules and regulations attached:

In Australia the process of bankruptcy happens in a federal circuit court. A person who claims to be your creditor can ask this court to declare you bankrupt.

In the USA the creditor must present the debtor with a statement saying they are being taken to court. The debtor has 20 days to respond. If they do not respond then the debtor has no other option but to be taken to court.

In Canada a creditor may file a bankruptcy application which states that the debtor owes 1,000 dollars or more, and the act of bankruptcy must have happened within the previous six months.

In England, before a creditor presents a petition to the court, they have to serve the debtor with a demand stating that the outstanding sum of 75 pounds or more must be paid within 21 days

How much does it cost?

Every country has a charge that you will need to incorporate into your debt amount. Each country’s fees vary:

In Australia there are many fees to take into consideration such as: Advertising, inspection, notices, agreements, and other services which all have a different price attached.

In the USA there are different chapters of bankruptcy which all have a different fee ranging from $246 to $1,300 depending on your situation.

In Canada you will need to pay a minimum amount for every month you are bankrupt to help with filing costs. This will be anywhere from 200 to 250 per month and you will also lose any money won at the time of the bankruptcy process.

In England there are set fees: £175 for court costs and £525 for management of your bankruptcy process.

Can I be rejected for bankruptcy?

There will be a number of things that will have to be carried out appropriately and correctly in order for you to be able to file for bankruptcy. If you do something wrong, you could be rejected for filing altogether, but again, the rules depend on the country you are living in.

In Australia a petition for bankruptcy can be rejected if the person is unwilling to pay their debts, they have been bankrupt three times previously, or once within the previous five years.

In the USA, mistakes or omissions in paperwork may be a cause for rejection, absences from a creditors meeting may be another one. Typically, some types of bankruptcy will not be allowed a repetition if it was filed for in the previous eight years, however, some might. The number of times you can file are case dependant.

In Canada you will be rejected if you have filed for bankruptcy in the previous seven years or if you have enough assets to cover your debts.

In the UK you must fill in all of the forms correctly and disclose everything in order for your petition to be accepted.

Restrictions while filing for bankruptcy

During and after the bankruptcy process every debtor has to face and of course follow certain restrictions:

In Australia written permission from your trustee must be granted in order for you to travel overseas while bankrupt.

In the USA, unless you get written permission to travel overseas, your passport will be taken from you during the process and there might be a bank status of ‘bankrupt’ for up to three years, depending on which state you reside in.

In Canada you must; keep your trustee informed as to where you are living, not borrow more than 500 dollars without full disclosure of your situation and at all times respond to your trustee’s requests.

In the UK during bankruptcy you are unable to: act as a company director, borrow more than £500 without disclosing bankruptcy to the lender, manage a business without full disclosure, or work as a debt specialist. These restrictions last 12 months, starting from the moment you were made bankrupt.

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Muzahed I.
Muzahed I.
I am Muzahedul Islam. Executive Editor of Reach me out for writing opportunities on this website.


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