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.
Bankruptcy can indeed be a final solution, but it is by no means an easy escape from financial responsibilities. Bankruptcy does not absolve the applicant from his obligations. This is why courts are extremely circumspect before they will consider an application. First they will apply a means test and then they will investigate the circumstances of the applicant. The court will not even hear the application until it is satisfied that it is valid.
Bankruptcy has serious long term consequences. It is much better to explore all the alternatives before filing for bankruptcy. In most cases creditors will negotiate with those in trouble. Monthly premiums can be lowered and stretched over a longer period. It is even possible to approach the court to order such new payment schedules. In many other cases financial experts can help those in trouble to consolidate their debt.
Applicants need to prepare themselves for intensive scrutiny. Their financial histories will be examined and they will be asked to explain the reasoning behind some of their previous financial decisions. They will have to make all their records available to the court and they will have to list all their assets and belongings, regardless of their value. The entire process can take a long time and it is very stressful.
The court will appoint a trustee as soon as it agrees to hear the application. The role of the trustee is to try and satisfy all the demands of the creditors. To this end he will seize and sell assets, leaving families with only the absolute minimum that will be necessary for survival. In the case of businesses he may decide to close them and to sell the assets.
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.
Few people fully understand the complexity of the bankruptcy process. That is why it is better to appoint a lawyer to handle an application. The lawyer will first consider all the alternatives, and if bankruptcy is truly the only solution, he will will handle the filing. He will also deal with the trustee and the creditors and he will help his client deal with the demands made upon him.
The purpose of the bankruptcy laws is not to provide a way in which an individual or a business can start again with clean slates. It is meant to ensure that justice is done. On the one hand, the demands of creditors must be considered, but on the other hand the applicant must be allowed to start his life anew.
Bankruptcy can indeed be a final solution, but it is by no means an easy escape from financial responsibilities. Bankruptcy does not absolve the applicant from his obligations. This is why courts are extremely circumspect before they will consider an application. First they will apply a means test and then they will investigate the circumstances of the applicant. The court will not even hear the application until it is satisfied that it is valid.
Bankruptcy has serious long term consequences. It is much better to explore all the alternatives before filing for bankruptcy. In most cases creditors will negotiate with those in trouble. Monthly premiums can be lowered and stretched over a longer period. It is even possible to approach the court to order such new payment schedules. In many other cases financial experts can help those in trouble to consolidate their debt.
Applicants need to prepare themselves for intensive scrutiny. Their financial histories will be examined and they will be asked to explain the reasoning behind some of their previous financial decisions. They will have to make all their records available to the court and they will have to list all their assets and belongings, regardless of their value. The entire process can take a long time and it is very stressful.
The court will appoint a trustee as soon as it agrees to hear the application. The role of the trustee is to try and satisfy all the demands of the creditors. To this end he will seize and sell assets, leaving families with only the absolute minimum that will be necessary for survival. In the case of businesses he may decide to close them and to sell the assets.
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.
Few people fully understand the complexity of the bankruptcy process. That is why it is better to appoint a lawyer to handle an application. The lawyer will first consider all the alternatives, and if bankruptcy is truly the only solution, he will will handle the filing. He will also deal with the trustee and the creditors and he will help his client deal with the demands made upon him.
The purpose of the bankruptcy laws is not to provide a way in which an individual or a business can start again with clean slates. It is meant to ensure that justice is done. On the one hand, the demands of creditors must be considered, but on the other hand the applicant must be allowed to start his life anew.
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