Bankruptcy is the legal term filed by an individual or an organization and business when there is inability of the debtor to pay their debts. Individuals drowned by debts are due to a number of factors including medical expenses that can arise from recent hospitalization due to accidents and injuries; loss of job is also another cause resulting from layoff, termination or resignation; lack of financial management is also another ground and this can usually arise from extensive usage of credit cards; and lastly, fortuitous events like earthquakes and floods can be causes and theft can also be grounds of bankruptcy.
On the other hand, there are some companies that file for bankruptcy petition against the debtor in an effort to seize properties from the latter in order to get even a portion of the debt. Declaration for bankruptcy is a tedious process. Be prepared for legal proceedings. It should be noted that not all bankruptcy proceedings and petitions are being granted and approved by the courts. If the court can see a probable property that can be made as payment to the debts, then bankruptcy is still not the solution. Meanwhile Chapter 11 is the United States Bankruptcy Code which focuses more on the reorganization of businesses and organization when facing severe debt. Furthermore it promotes the security and protection of the organizations and businesses in debt from creditors. When in debts, you should be able to make good financial management in your cash inflows to slowly pay debts. Furthermore it is your reputation that is put in line so do not mar it.
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