Historically bankruptcy was viewed as dishonorable and bankrupt individuals were stigmatized and shunned by society. Nowadays, bankruptcy is seen as an acceptable option to seek when an individual, business or entity is facing dire financial crises. If your business is facing a credit crunch consulting bankruptcy lawyers can help you out of your mess.
According to statistics, a majority of start-ups fail within a few years of inception. Businesses need credit to survive and every now and then cannot pay bills to remain solvent. Individuals too can suddenly find themselves knee deep in debt. Unforeseen circumstances can lead to a downturn in your financial health. Overcharging your credit card and poor spending habits can be a reason. Often job losses, medical emergencies, divorce and other exigencies can suddenly put you in financial trouble.
Bankruptcy lawyers can advise you of the various options at your disposal to resolve your crisis. Filing for bankruptcy is often treated as the last resort. In most cases you will not lose all you own but you could end up losing some non-exempt properties like stocks, bonds, bank savings and other investments, tax refunds, proceeds of law suits, cash value of life insurance policies, antiques and collectibles, a vacation home and second car. The property that is considered exempt varies from state to state. If you are planning to file for a bankruptcy petition, any indication that you have recently transferred non-exempt property to exempt property can be harmful to your case.
The goal of a bankruptcy court is to give the debtors a fresh start and to provide the creditors with monetary compensation. The assets of the debtor are liquidated to repay the creditors. Alternatively the finances of the debtors can be restructured so as to repay their outstanding loans from creditors.
Debt relief can wipe out your outstanding debt or reorganize it to allow you more time to repay your loans. In most cases, you will be required to pay tax dues, alimony and child support, student loans and other long term secured loans and any compensation you owe to victims of a criminal act that you may have conducted.
If your bankruptcy lawyers recommend you file for bankruptcy, you require attending credit counseling. If you are filing under Chapter 7, you might have to undergo a means test to assess if you qualify for petitioning. Once you have undergone the state mandated counseling and means tests, your bankruptcy lawyers would submit your petition and accessory documents for review.
