Bankruptcy is one way of dealing with unpaid debts and obtaining accurate bankruptcy information is essential before you decide to file a case for bankruptcy. The bankruptcy law allows for the formulation of a plan that allows the debtor to settle his debts by dividing his assets among his creditors. Supervised division of assets in this manner also helps the creditors to be treated fairly and equally. In certain cases, bankruptcy proceedings permit a debtor to continue his business and use the revenue generated thereof to settle his debts. In certain other cases, bankruptcy laws allow debtors to be discharged of their financial obligations once their assets have been liquidated. This holds well even if their debts have not been settled in full.
The Process Of Bankruptcy
A bankruptcy case is initiated by filing a petition. Filing for bankruptcy is a major decision of your life and hence, you must collect all the required bankruptcy information before taking this major step. The main aim of bankruptcy is to provide a fresh start to genuine debtors. When filing for bankruptcy, you should also file a statement of your assets and liabilities as well as schedules listing your creditors. The assets or property that can be kept by the debtor depends on the specific exemptions that are available under the state law. Bankruptcy information enables you to search for state exemptions. In certain states, residents are allowed to opt for federal exemptions instead of state exemptions.
Can A Court Refuse Bankruptcy?
In a majority of the cases, debtors are granted bankruptcy. However, in certain circumstances, the bankruptcy court may refuse bankruptcy to some applicants. Usually a denial of bankruptcy happens when:-
•The debtor fails to give a proper explanation for the loss of his assets.
•A debtor is unable to give adequate reasons for his state of bankruptcy.
•The debtor fails to act according to the rules of the bankruptcy court.
•The debtor commits an act of perjury during the time of his bankruptcy.
•The debtor has falsely concealed, transferred or destroyed assets that should have been revealed at the time of declaration of bankruptcy
Alternatives To Bankruptcy
Prior to filing for bankruptcy, a debtor needs to try some of bankruptcy alternatives such as-
•Judgment proof: If you have a negligible income and you still owe money to creditors, then you may be considered as judgment proof or collection proof. This means that even if you are sued, your creditors will not be able to collect because legally, there is nothing to collect.
•Negotiate with creditors: Call creditors and negotiate with them to try and work out alternative solutions.
•Refinancing loans on better terms.
•Credit counseling: Opt for these non profit organizations that work towards reduction of interest rates.
Collect the necessary bankruptcy information before taking a decision whether to file for bankruptcy or not.