Process of Filing for Bankruptcy
When a firm or company is experiencing a serious debt problem, maybe the last option for that company to take as a course of action is to file for bankruptcy. But before filing for bankruptcy, the best and proper way to do is to seek legal counsel from a bankruptcy lawyer who can study for available options, weighing down the pros and cons, so that the company can have a clear profile on their firm’s financial condition and sustainability, such that the right course of action can be resolved and with that, bankruptcy may even be not the solution at all.
The court considers bankruptcy as a legal procedure for businesses or individuals, who are deeply in debt, to repay all or some of their debts under the legal guidance and protection of the court. There are two types of bankruptcy, liquidation and reorganization, which is legally considered depending on the nature of the debt problem of the business.
It is always advisable to hire a bankruptcy lawyer so that he/she can study your income, debts and assets and provide you what options to consider, such that bankruptcy should be the least of these considerations.
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One option is for the bankruptcy lawyer to come up with a payment plan, that is realistic and affordable on your end and may satisfy your creditor; one that will keep creditors from harassing you for late payments. With the bankruptcy lawyer presenting a payment plan to your creditors will definitely earn their confidence on your effort of resolving your debts to them in a professional way.
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When the payment plan is not possible than the bankruptcy lawyer will take the course of action to advise you to file for insolvency, recommend the type of bankruptcy to file, and provide a job contract to work on this. Whichever is the state of your debt condition, the bankruptcy lawyer will provide you information on the types of bankruptcy procedures and which among these should you file for.
If your condition falls under liquidation, you are either advised to file for either Chapter 7 or Chapter 13 of the Bankruptcy Law. Filing for Chapter 7 will allow debtors to pay out his/her debts in exchange for giving up non-exempt properties which will have to be sold to repay the creditors. For Chapter, a debtor can keep his/her properties and instead repay his/her creditors, all or some, over a period of 3 to 5 years. The usual norm, after filing for either Chapter 7 or 13 and granted by the court, is to appoint a trustee to oversee the payments of liquidation of the assets.
Chapter 11 is filed for if the lawyer sees that the company is still viable so that the law will permit for a reorganization of the debt load to allow the company to stay in business.
Hiring a bankruptcy lawyer is the best thing to do to help resolve your financial problems and be, at least, free of worry and stress. With that course of action you now have a chance to renew a fresh start in life.