What happens to debts in consumer bankruptcy with no assets?

It may seem that the lack of assets prevents debt relief. This is not true, because if a consumer bankruptcy is filed, further debt relief proceedings may proceed according to various scenarios depending on the debtor’s financial situation:1.The court may establish a repayment plan for creditors – if the debtor has no assets, but has income (e.g., from gainful employment or a pension), creditors will be paid just from his current income according to a specified repayment schedule. 2.Debts will be completely forgiven – in the absence of assets, complete forgiveness of debts is possible when the debtor is permanently unable to pay his obligations, for example, due to disability or chronic illness. 3.Debts will be conditionally forgiven for up to 5 years – the court may make such a decision if there is a chance that within a certain period of time the debtor will regain the ability to repay the debt, e.g. as a result of regaining health or receiving an inheritance. If this occurs within a certain period of time, at the request of the debtor or creditor, the court will revoke the redemption order and set a repayment plan.

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