Bankruptcy is a phrase heard and used by many. Individuals tend to have pre-conceived notions about bankrupts that they are individuals who are totally broke. But bankruptcy information can be a real eye opener for debtors who are contemplating bankruptcy and individuals who are seeking information about bankruptcy. It helps debunk all the myths attached to 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 organization to pay their creditors. In majority of the cases, bankruptcy is initiated by debtors or organization themselves. The main purpose of bankruptcy law is to provide any honest debtor a chance to start afresh and to help a debtor repay his/her creditor/s in an orderly manner to the best extent possible by the debtor. Debtors are discharged of most of their financial obligations after their non-exempt assets have been distributed. Creditors can no longer harass debtors or continue any lawsuits once the debtor has opted for bankruptcy.
2)Implications of bankruptcy:
Filing bankruptcy is one of the hardest financial decisions. Debtors must carefully examine the implications of bankruptcy and choose it as a last resort to deal with financial troubles. Following are the implications of bankruptcy:
Lose control over your assets (except items/equipment required for work/household purposes)Cannot act as director of a company/practice as a lawyer/chartered accountantNegative publicity as a bankruptcy is advertised in ‘London Gazette’ and a local newspaperBankruptcy remains on record with credit agencies, land registry and other organizations
3)Common terms to understand bankruptcy
Bankruptcy petition: Individuals who opt for bankruptcy need to formally request protection of the federal bankruptcy laws. It involves filling of two important forms-The petition (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 be sold and the proceeds will be distributed among his/her creditors. Chapter 13 bankruptcy: This chapter of bankruptcy provides a reorganization plan for individuals with regular income. It allows a debtor to retain his/her property and pay back his/her debt within 3-5 years.
Debtors could also consider various alternatives to bankruptcy before filing for bankruptcy. IVA, debt consolidation loan, debt management etc are proven alternatives to bankruptcy which the debtor can consider before he/she files for bankruptcy.
For comprehensive bankruptcy information log on to www.bankruptcy-information.bankruptcy help
Posts Tagged ‘Bankruptcy’
Bankruptcy Information: a Helping Hand in Trying Times
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Practical Bankruptcy Law for the Paralegal, Third Edition
Product DescriptionPractical Bankruptcy Law for Paralegals is the textbook that meets all the needs of paralegal students exploring the topic of bankruptcy as it relates to their future profession. It presents this sometimes-complex subject in a straightforward manner. The text explores why bankruptcy law covers what it does, the written and unwritten rules of procedure that guide how the substantive law of bankruptcy is implemented and the necessary tools for mastering the procedural… More >>
Practical Bankruptcy Law for the Paralegal, Third Edition
Debt Negotiation: Successfully Avoiding Bankruptcy
Publicity is one of the most influential factors on people’s decisions. If your product is well promoted, it does not mean it has the best quality. The product itself can be standard and will be used by people anyway.
Debt negotiation is one of the most advertised services in the web. LOWER PAYMENT BY 45% – ENJOY A DEBT FREE LIFE IN LESS THAN 6 MONTHS – and so on and so forth. Ads are everywhere on the net, and they focus in attracting possible clients, not in the details. After someone hits on an ad, the rest lies on the hands of the online marketers or in some computerized automated service.
People need to learn more about the process itself, and if debt negotiation is the proper way to go. Self-teaching about the pros and cons of debt negotiation is a good first step. One of the first things to know is that the term “debt negotiation” is also known as debt arbitration or debt settlement.
To begin with, a lender has little motivation to arbitrate anything less than the full amount of the debt unless the person is two to three months behind in payment. But remember that debt negotiation, a legal method as it is, fits the description of a last-resort measure. The truth of the matter is that debt negotiation is one step away from filing for bankruptcy. You have to consider that your lender gave you the money or property in good faith, so he or she has every right to expect that the loan be repaid in no less than full amount.
Even though you may want to repay the loan or debt in full, this is not always possible because you do not have the means – not now and not in the foreseeable future. This is where debt negotiation comes into play. It may be your only logical course of action and way out.
Katherine Cole applied for debt negotiation a few months ago seeking professional counseling due to the excessive debts. Elizabeth Laurent, professional counselor, took her case and worked with her in order to set up a payment plan to ensure the payment of the debts. Creditors will see that she is making and effort and will be more accessible to make deals.
Katherine Cole:
Is debt negotiation bad?
Elizabeth Laurent:
If you are delinquent, debt negotiation can be the best decision to make. Reach out for professional counseling on debt negotiation and let a team of negotiators give you advice on what to do and how to face you debt situation. They will certainly deal with your creditors and lighten your current situation.
Katherine Cole:
Will debt negotiation affect my credit?
Elizabeth Laurent:
Yes. Debt negotiation will show in credit reports; and as long as you stay in the debt negotiation program, you will not be able to apply for new loans or credit lines. You will have to stay away from any kind of credit services. On the other hand, once you finish paying off [...]
