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There is a steady increase in the number of businesses and individuals that apply for bankruptcy. In some cases such applications are the result of financial irresponsibility, but in many cases applicants simply find themselves in very severe financial trouble due to circumstances completely out of their control. In most cases applicants approach the courts when they no longer see any way in which they can survive financially. When applying according to Chapter 11 Oakland applicants are taking a very serious step.
Anyone that files for bankruptcy, thinking that it is a quick and easy way out of their financial responsibilities is in for a very rude awakening. The courts do not issue bankruptcy orders without doing a thorough investigations and before applying a means test. The court must be satisfied that the applicant has no other choice but to make his application. The entire process can be lengthy and very stressful.
Bankruptcy should always be the absolutely last resort. There are alternatives. Those in trouble should communicate with their creditors and try to negotiate more favourable payback schedules. In some cases they can even approach the court to order a review of they payback plans with their creditors. In many cases it is possible to obtain finance in order to consolidate all the debt.
It must be understood that the process of applying for bankruptcy can be lengthy and even humiliating. Every aspect of the lives of applicants will come under scrutiny. They will be required to declare all their financial dealings, their expenditure, their income and their assets. They will be obliged to allow access to every record pertaining to their financial status.
Once the court accepts a bankruptcy application, it will appoint a trustee to oversee the process. The trustee will focus on satisfying the demands of the creditors, not the needs of the applicant. He will attach the assets of the applicant and sell them in order to distribute money among the creditors. In the case of businesses he may decide to sell it, to strip it of its assets or even to continue its operations.
The court will finally issue a discharge when it is convinced that every effort has been made to reimburse the creditors. Once this is done, creditors may not make further demands on the applicant. This does not release the applicant from his obligations regarding tax, loans that were secured by assets, child support payments and fines. These obligations remain and must be honoured.
Because the process of applying for bankruptcy is so stressful and complex, it is better to leave matters in the hands of an experienced attorney that specialize in these cases. He can often negotiate more lenient terms from the trustee and he will guide his client throughout the process. He will also advise his client about alternative solutions before finally filing for bankruptcy.
Bankruptcy is not meant to serve as a loophole for irresponsible people and businesses. It is designed to help those that truly fall foul of circumstances outside their control. That is why the process is so lengthy and strict.
Anyone that files for bankruptcy, thinking that it is a quick and easy way out of their financial responsibilities is in for a very rude awakening. The courts do not issue bankruptcy orders without doing a thorough investigations and before applying a means test. The court must be satisfied that the applicant has no other choice but to make his application. The entire process can be lengthy and very stressful.
Bankruptcy should always be the absolutely last resort. There are alternatives. Those in trouble should communicate with their creditors and try to negotiate more favourable payback schedules. In some cases they can even approach the court to order a review of they payback plans with their creditors. In many cases it is possible to obtain finance in order to consolidate all the debt.
It must be understood that the process of applying for bankruptcy can be lengthy and even humiliating. Every aspect of the lives of applicants will come under scrutiny. They will be required to declare all their financial dealings, their expenditure, their income and their assets. They will be obliged to allow access to every record pertaining to their financial status.
Once the court accepts a bankruptcy application, it will appoint a trustee to oversee the process. The trustee will focus on satisfying the demands of the creditors, not the needs of the applicant. He will attach the assets of the applicant and sell them in order to distribute money among the creditors. In the case of businesses he may decide to sell it, to strip it of its assets or even to continue its operations.
The court will finally issue a discharge when it is convinced that every effort has been made to reimburse the creditors. Once this is done, creditors may not make further demands on the applicant. This does not release the applicant from his obligations regarding tax, loans that were secured by assets, child support payments and fines. These obligations remain and must be honoured.
Because the process of applying for bankruptcy is so stressful and complex, it is better to leave matters in the hands of an experienced attorney that specialize in these cases. He can often negotiate more lenient terms from the trustee and he will guide his client throughout the process. He will also advise his client about alternative solutions before finally filing for bankruptcy.
Bankruptcy is not meant to serve as a loophole for irresponsible people and businesses. It is designed to help those that truly fall foul of circumstances outside their control. That is why the process is so lengthy and strict.
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