What is bankruptcy? Bankruptcy is a serious matter. You will have to give up any possessions of value and your interest in your home. It will almost certainly involve the closure of any business you run and the dismissal of your employees. Bankruptcy will also impose certain restrictions on you. You do not have to become bankrupt just because you are in debt.
Bankruptcy is one way of dealing with debts you cannot pay. Anyone can go bankrupt, including individual members of a partnership. In dealing with bankruptcy, bankruptcy information is a need. This will inform you on how are you made bankrupt? A court makes a bankruptcy order only after a bankruptcy petition has been presented. You should therefore co-operate fully once the bankruptcy proceedings have begun. Trying to do so after the bankruptcy order has been made is both difficult and expensive.
If this applies to you, you may wish to seek separate legal advice through bankruptcy laws. Where is the bankruptcy order made? Who will deal with your case? Sometimes government departments start bankruptcy proceedings in the High Court or in a local county court and, if a bankruptcy order is made, it will be dealt with by the local official receiver. Most bankruptcy cases are filed under the three main chapters of bankruptcy code namely; Chapter 7, Chapter 11, and Chapter 13.
Bankruptcy is actually very complicated. Have you ever asked yourself what is the difference between Chapter 7, Chapter 11, and Chapter 13? Come and let's take a look.
Chapter 7 bankruptcy explained. It is often denoted as the "liquidation" bankruptcy. It generally allows the debtor to eliminate debts without repaying them. This type of bankruptcy is usually reserved for individual debtors, not those who run businesses or businesses themselves. Under Chapter 7 Bankruptcy protection, a trustee is appointed to the filer, and is responsible for ensuring that any assets that are secured and can be sold are sold and that the proceeds from the sale are given to the specific creditor that secured the purchase in the first place.
Usually if the court finds the individual did not produce adequate financial records, committed a crime of perjury, unable to explain loss of assets, concealed, illegally transferred property to try and move it out from the estate and failed to complete a financial management course as required of all debtors filing bankruptcy, an individual may be denied debt discharges under Chapter 7.
Chapter 11 bankruptcy explained
It is denoted as the "rehabilitation" bankruptcy. The individual or business can file for Chapter 11, in other words the creditors may involuntarily file for the debtor in certain situations. Under Chapter 11, debts are reorganized to allow the individual or business a better chance of repaying them. The creditors are contacted to get different terms on any loans and interest rates may be lowered.
This will not allow you to get rid of your debts, you are just simply restructuring and changing the terms of the debt and making plans to pay it back continuously through future earnings
Chapter 13 bankruptcy explained
It is also called a "wage earner's plan" bankruptcy. It enables the individuals with regular income to develop a plan to repay all or part of their debts. The debtors propose a repayment plan to make installments to creditors over three to five years.
Under Chapter 13, the individuals will have an opportunity to save their homes from foreclosure. This may help solve delinquent mortgage payments over time, it allows individuals to reschedule secured and extend them over the life of the plan. Doing this may lower the payments.
There are online resources that will serve as a bankruptcy help that will help you know what the duties are as a bankrupt? How will bankruptcy affect you? In terms of your relation to your creditors, your assets, what happens to your home, your pension, your life assurance policy, work-related registrations, licenses and permissions, your business and wages? In addition to that you will also know what the restrictions on being a bankruptcy are.
Becoming free from bankruptcy is like knowing how long does a bankruptcy last. You will be automatically freed from after a maximum of 12 months. This period may be shorter if the official receiver concludes his or her inquiries into your affairs and files a notice in court. You will also become free from bankruptcy immediately if the court annuls.
You may consult a lawyer for help and advice such as dealing with debt, how to make someone bankrupt, how to wind up a company that owes you money, how to wind up your own company and how to wind up a partnership.