There are many reasons why people land up in financial difficulties. People lose their jobs or are forced to spend all their savings on expensive medical treatment. Others are simply financially irresponsible and live beyond their means. Businesses may suffer due to rapidly changing markets. The list is endless but the fact remains that there are more and more people who simply cannot service their debt any longer. However, before applying for Chapter 11 bankruptcy Salinas citizens should think very carefully.
It is a common misconception that insolvency is a quick way in which to deal with overwhelming debt. This is most definitely not the case. Applications for insolvency are not accepted by the courts before they have made very sure that the applicant truly does not have the means to honor his obligations. To this end a means test is applied. Stringent criteria are applied during this process.
Insolvency is not a solution to financial troubles. It is a serious step that may have detrimental consequences for applicants lasting many years. It should always be the absolutely final resort when every other option has been exhausted. Those in trouble should try other remedies first, such as being honest with their creditors and by asking them to agree to lower monthly premiums over a longer payment period.
The process by which applications for insolvency is handled almost always involves humiliation and tremendous stress. The applicant has to submit to financial scrutiny and an inventory of all his assets must be handed to the court. His lifestyle will be examined and he may have to explain his expenditure and general financial management. This process takes time.
If the court agrees to hear an application, it will immediately appoint a trustee. The job of this trustee is to do everything possible to raise the money demanded by the creditors of the applicant. To this end he may confiscate all the assets of the applicant and sell them on an open auction. All the money thus raised will be distributed among the creditors.
Only when the trustee informs the court that he has done all that he can to pay the creditors of the applicant will a final discharge order be granted. This means that creditors will no longer be able to make any financial demands upon the applicant but it does not mean that the applicant is freed from all debt. Secured loans, taxes and spouse of child support payments still have to be honored.
Far too many forced into insolvency waited way too long before they acted on their troubles. Professional help should be obtained at the very first instance when it becomes clear that the financial burden is becoming unmanageable. Ignoring a problem never makes it disappear. If help is obtained at an early stage a rescue plan can almost always be formulated and implemented.
Bankruptcy is not an easy way out of financial trouble. Bankrupt individuals will struggle to enter into any financial agreement and they will not qualify for any form of financing. It may take many years to recover from the loss of all the assets and loved ones will suffer in the process.
It is a common misconception that insolvency is a quick way in which to deal with overwhelming debt. This is most definitely not the case. Applications for insolvency are not accepted by the courts before they have made very sure that the applicant truly does not have the means to honor his obligations. To this end a means test is applied. Stringent criteria are applied during this process.
Insolvency is not a solution to financial troubles. It is a serious step that may have detrimental consequences for applicants lasting many years. It should always be the absolutely final resort when every other option has been exhausted. Those in trouble should try other remedies first, such as being honest with their creditors and by asking them to agree to lower monthly premiums over a longer payment period.
The process by which applications for insolvency is handled almost always involves humiliation and tremendous stress. The applicant has to submit to financial scrutiny and an inventory of all his assets must be handed to the court. His lifestyle will be examined and he may have to explain his expenditure and general financial management. This process takes time.
If the court agrees to hear an application, it will immediately appoint a trustee. The job of this trustee is to do everything possible to raise the money demanded by the creditors of the applicant. To this end he may confiscate all the assets of the applicant and sell them on an open auction. All the money thus raised will be distributed among the creditors.
Only when the trustee informs the court that he has done all that he can to pay the creditors of the applicant will a final discharge order be granted. This means that creditors will no longer be able to make any financial demands upon the applicant but it does not mean that the applicant is freed from all debt. Secured loans, taxes and spouse of child support payments still have to be honored.
Far too many forced into insolvency waited way too long before they acted on their troubles. Professional help should be obtained at the very first instance when it becomes clear that the financial burden is becoming unmanageable. Ignoring a problem never makes it disappear. If help is obtained at an early stage a rescue plan can almost always be formulated and implemented.
Bankruptcy is not an easy way out of financial trouble. Bankrupt individuals will struggle to enter into any financial agreement and they will not qualify for any form of financing. It may take many years to recover from the loss of all the assets and loved ones will suffer in the process.
About the Author:
Get fantastic tips on how to pick a Chapter 11 bankruptcy Salinas lawyer and more info about a knowledgeable attorney at http://www.centralcoastbankruptcy.com/bankruptcy-overview.html right now.
No comments:
Post a Comment