Bankruptcyis an essential concept in business since it relieves individualsfaced with financial difficulties from an overwhelming debt. It canalso improve someone’s short-term quality life through the stoppageof bank letters and calls. In contrary, bankruptcy can affect thedebtor’s future credit, self-image, and reputation.Bankruptcycan be defined as the process in which an individual legally declaresherself/himself or her/his business incapable of paying itsoutstanding debts. I have gone through the entire site and come outwith certain observations that will not only sharpen my understandingin the course but also help in my future job.
Thissite mainly contains the definition of bankruptcy, chapter13-bankruptcies, legal help and resources, chapter 7-bankruptcies,and debt relief. There exist different types of bankruptcies, but theproceedings in chapter seven and chapter thirteen are the most commonfor people and businesses (Tabb, 2013). Chapter seven bankruptciesusually fall in the liquidation grouping, meaning that if someoneowns a property, the property can be taken and sold in liquidationprocess so as to pay back his or her outstanding debts. On the otherhand, chapter thirteen majorly fall in the reorganization grouping,meaning the person will perhaps be able to keep his or her propertyafter submitting a plan which will allow him or her to repay some ifnot all his debts within the given period. Notably, both thebusinesses and individuals are permissible to file chapter sevenbankruptcies.
Chapter13 bankruptcy can be filed under a particular procedure for example,it necessary for a debtor to visit credit counseling before fillingfor the bankruptcy. After completing credit counseling, the debtorhas to pay 274 sterling pounds and also provide a bankruptcy courtwith the relevant information (Tabb, 2013).Immediatelythe court receives the appropriate paperwork the trustee reviews thecase and also holds the creditors meeting. It is necessary tounderstand that Chapter 13 bankruptcies rule does not allow thecreditor to pursue any activity when the debtor has filed for thebankruptcy against him or her.
Theconsequences of a student’s loan can be severe if it defaults sinceit has many restrictions (Tabb, 2013).Nevertheless,there exist a number of options which can be used if someone has astudent loan default. These alternatives may include delayingpayments on the loan mainly through deferment programs orforbearance, discharging the loan through bankruptcy proceedings, andlastly eliminating all the payments. A student loan may be deferredor cancelled if the borrower dies or suffers from a permanentdisability.
Chapter13 bankruptcy states that a debtor is eligible of discharge uponcompleting all the payments under the plan and certifying thedomestic support obligations which came due prior. He or she has alsoto complete the approved course (financial management). Businessescompete to get discharged since discharge has got positive impacts,for instance, the discharge releases the debtor from all debts whichare in the bankruptcy code. Debts such as home mortgage, alimony,government funded loans, and taxes are however not obliged todischarge since they are contained in chapter 13.
Asoutlined in Chapter 13 under the bankruptcy code, any debtor has tomeet certain criteria to qualify for bankruptcy i.e. only thosefilling as wife and husband or individuals are obliged to file forChapter 13 bankruptcies. Businesses such as limited liabilitycompanies and corporations are ineligible for chapter 13 bankruptciesand instead must file for Chapter 11(Tabb, 2013). Notably, smallbusiness owners like sole proprietors and partnerships might not fileusing the business name instead will file using their own names forthe debts they are personally liable for.
WhatI have learned in this particular site has got a greater relationshipwith what I have been watching and reading in videos and books. Forinstance, the qualification for bankruptcy is similar in both casesthat is, the debtor has to fulfill the credit counseling requirementsand must not be barred by a prior bankruptcy case (Tabb, 2013). Thismeans that if a debtor discharged a debt in Chapter 13 within lastthe two years or discharged the debt in chapter 7 within last thefour years then he/she becomes ineligible for chapter 13 dischargetill the requisite period elapses.
Thereare also legal help and resources which can be used to solvebankruptcy problems and debts. The bankruptcy court state-by-state inU.S for instance has greatly helped in bankruptcy matters since ithas local forms, opinions, rules, reference manual, and bankruptcydata which act as sources of evidence against a debtor and acreditor.
Inconclusion, the process of bankruptcy is complex and mainly relies onlegal concepts such as the automatic stay discharge and exemptions.Even though the process is complex, bankruptcy discharge has helpedby debtors through releasing them from specific debts and forbiddingcreditors from taking any wrong action against them.
Tabb, C. (2013). Law of Bankruptcy (Hornbook Series). West Academic.