Business owners and consumers usually have a number of options when they want to get rid of their debt in a legal way. While debt consolidation and refinancing can be helpful, some debts are simply too large to be serviced accordingly. In some cases, debtors have to file for bankruptcy CA to have their debts written off. Knowing the pros and cons of bankruptcy can help debtors to make informed decisions.
Businesses can seek to become bankrupt under two chapters. These are chapters 7 and 11. The former provides for debt forgiveness through liquidation of assets belonging to the business debtor while the latter provides for debt forgiveness through debt reorganization. This means that the business will have to make regular monthly debt payments for several years to get debt forgiveness.
Chapter 13 is meant for individual debtors. Individual consumers can have their debts forgiven through this chapter as well as chapter 7. On the other hand, chapter 13 provides for debt reorganization, so the debtor can retain all their assets as they pay their debts. With chapter 7, assets belonging to the debtor will have to be disposed off to pay their debts.
There are several negative effects of becoming bankrupt. For one, your credit report will show that you are bankrupt, so nobody will be willing to lend you money. Secondly, the reputation of your business will be adversely affected, and this may force you to close shop. In case of personal bankruptcy, your friends, colleagues, neighbors and relatives will start looking at you differently.
Becoming bankrupt can lead to job loss if you have a job that can only be handled by financially responsible persons. When you become bankrupt, therefore, you may be fired because you no longer meet the minimum requirements for holding that office. To make matters worse, finding a similar or better job will also be challenging.
It is always recommended you consult a suitable lawyer before deciding to become bankrupt. This is because you may not be fully aware of the legal consequences of becoming bankrupt. By consulting a lawyer, you will be able to make an informed decision. To find the right lawyer, simply search the web and compare their experiences and reputation before making a decision.
Student loan debts, alimony and child support payments cannot be written off when you become bankrupt. If these debts form a huge chunk of your outstanding debts, therefore, you should rethink your decision to become bankrupt. After all, this option will only complicate matters for you. Since you may not know what this law entails, you must hire a competent lawyer to explain the contents of the Federal Bankruptcy Act to you.
Once you have filed the necessary paperwork in court, a trustee will be appointed. This is the person responsible for overseeing the proceedings. In case of chapter 7, the trustee will arrange the auction and pay your debts. In a chapter 11 or 13, they will collect the monthly payments during the bankruptcy period. The trustee will also make sure that you comply with the terms and conditions of the bankruptcy.
Businesses can seek to become bankrupt under two chapters. These are chapters 7 and 11. The former provides for debt forgiveness through liquidation of assets belonging to the business debtor while the latter provides for debt forgiveness through debt reorganization. This means that the business will have to make regular monthly debt payments for several years to get debt forgiveness.
Chapter 13 is meant for individual debtors. Individual consumers can have their debts forgiven through this chapter as well as chapter 7. On the other hand, chapter 13 provides for debt reorganization, so the debtor can retain all their assets as they pay their debts. With chapter 7, assets belonging to the debtor will have to be disposed off to pay their debts.
There are several negative effects of becoming bankrupt. For one, your credit report will show that you are bankrupt, so nobody will be willing to lend you money. Secondly, the reputation of your business will be adversely affected, and this may force you to close shop. In case of personal bankruptcy, your friends, colleagues, neighbors and relatives will start looking at you differently.
Becoming bankrupt can lead to job loss if you have a job that can only be handled by financially responsible persons. When you become bankrupt, therefore, you may be fired because you no longer meet the minimum requirements for holding that office. To make matters worse, finding a similar or better job will also be challenging.
It is always recommended you consult a suitable lawyer before deciding to become bankrupt. This is because you may not be fully aware of the legal consequences of becoming bankrupt. By consulting a lawyer, you will be able to make an informed decision. To find the right lawyer, simply search the web and compare their experiences and reputation before making a decision.
Student loan debts, alimony and child support payments cannot be written off when you become bankrupt. If these debts form a huge chunk of your outstanding debts, therefore, you should rethink your decision to become bankrupt. After all, this option will only complicate matters for you. Since you may not know what this law entails, you must hire a competent lawyer to explain the contents of the Federal Bankruptcy Act to you.
Once you have filed the necessary paperwork in court, a trustee will be appointed. This is the person responsible for overseeing the proceedings. In case of chapter 7, the trustee will arrange the auction and pay your debts. In a chapter 11 or 13, they will collect the monthly payments during the bankruptcy period. The trustee will also make sure that you comply with the terms and conditions of the bankruptcy.
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