All you need to know about personal bankruptcy!

In order to get off to a good start in a situation of over-indebtedness, declaring personal bankruptcy is a measure that is more and more seriously studied and often adopted by many executives but also individuals in difficulty. Discover with us in this article what this procedure concretely and what it can offer as advantages.

The benefits of a personal bankruptcy declaration

If the unfortunate consequences of a personal declaration of bankruptcy are numerous, its advantages are not to be minimized- all you need to know.

Indeed, declaring oneself in personal bankruptcy allows:

  • Cancellation of the majority of debts including even tax debts
  • Provide protection against possible lawsuits brought by creditors
  • Sheltering against possible cuts made by the public services. Ex: telephone, electricity.
  • The conservation of a minimum of vital goods inherent to his dignity: furniture, house and sometimes even the car.

Initiate an application for personal bankruptcy

First of all, as you will have understood, the personal bankruptcy application procedure must only be used as a last resort. Because despite the fact that this procedure can be beneficial in many ways for your case as we have just seen, other solutions may be much more interesting for you.

So, make sure you have exhausted all your resources: consulting financial experts, bankruptcy experts, considering all the possible credit options, etc.

Then if the financial professionals prove to you that yes, your case is indeed critical and that to initiate a procedure for application of personal bankruptcy is the best option to relieve you of your financial problem, you can turn calmly towards this procedure.

Thus, if 2 other parties can take the initiative to seek bankruptcy, creditors and the Public Ministry, in particular, the debtor is legally obliged to confess to bankruptcy at the registry of the Commercial Court in the month following the cessation of payment, on pain of incurring liability.

This admission of bankruptcy is thus admissible for a legal person when three (03) conditions are met.

Those are :

  • the merchant status of the debtor and the cessation of his activities for less than 6 months
  • the persistent termination of the debtor’s payments as well as the non-respect of any negotiated settlement plans.
  • The loss of confidence of creditors vis-à-vis the debtor

For an individual, the conditions will be:

  • The capacity of the debtor individual to prove his over-indebtedness
  • The ability to prove that no amicable agreement could be negotiated with the creditors
  • And finally the financial capacity for procedural costs