Information of bankruptcy a helping hand in hard times
Bankruptcy is a phrase heard and used by many. People tend to have preconceived ideas about bankruptcy that are individuals who are completely broken. But information bankruptcy can be a real eye opener for debtors who are contemplating bankruptcy and people who are looking for information about bankruptcy.
1) What is bankruptcy?
Bankruptcy is a legal term to formally identify an individual as bankrupt. It refers to the inability of any debtor or the Organization to pay their creditors. In the majority of cases, bankruptcy begins with the Organization of debtors or themselves. The main objective of the Bankruptcy Act is to provide any honest debtor the opportunity to start again and to help a debtor to pay his creditor / s of an orderly to the greatest extent possible by the debtor. Debtors are discharged from most of your obligations financial after their non-exempt assets have been distributed. Creditors may not harass debtors or continue any demand once the debtor has opted for bankruptcy.
(2) Consequences of bankruptcy:
the bankruptcy filing is one of the decisions more difficult financial. Debtors must carefully examine the consequences of the bankruptcy and choose it as a last resort to deal with financial problems. Below are the consequences of bankruptcy:
You lose control over your assets (except for the parts and equipment necessary for the work and home)
May not act as a director of a corporation or practice as lawyer / accountant
The negative publicity as the bankruptcy is announced in ‘ London Gazette “and a local newspaper
Bankruptcy remains in the registry with organisms of credit, land registry and other organizations
(3) Common terms to understand bankruptcy
bankruptcy petition: individuals who opt for bankruptcy need to apply formally for the protection of federal bankruptcy laws. It’s fill two forms import antes-La request (insolvency rules 1986 form 6.27) and the statement of Affairs (insolvency rules 1986 form 6.28).
Chapter 7 bankruptcy: this chapter of the Bankruptcy Code provides for “liquidation”. the debtor’s non-exempt property will they be sold and the product will be distributed among creditors.
Chapter 13 bankruptcy: this chapter of bankruptcy offers a plan of reorganization for individuals with regular income. Allows that a debtor keep his property and pay off your debt within 3-5 years.
Borrowers could also consider several alternatives to bankruptcy prior to applying for bankruptcy. IVA, debt consolidation loan, etc of debt has been shown alternatives to bankruptcy the debtor may consider before he / she is declared bankrupt.