Bankruptcy - Liquidating one’s Assets to Pay off Creditors/Lenders
"Bankruptcy - Liquidating one’s Assets to Pay off Creditors/Lenders" submitted by SchoolGrantsfor Editorial Team and last updated on Monday 9th January 2012
When a person is declared bankrupt, he is found to be legally insolvent and his property is distributed among his creditors or otherwise administered to satisfy the interests of his creditors. Federal student loans, however, cannot normally be discharged through bankruptcy.
Bankruptcy is the process of liquidating one’s assets to pay off creditors/lenders. Bankruptcy is considered the credit solution of last resort. Unlike negative credit information that stays on a credit report for seven years, bankruptcies stay on a credit report for 10 years. Bankruptcy can make it difficult to rent an apartment, buy a house or condo, get some types of insurance, get additional credit, and sometimes, get a job. In some cases, bankruptcy may not be an easily available option.
Once declared 'bankrupt', the bankrupt cannot operate a BANK account or borrow monies from a bank until discharged as a bankrupt. The device came into existence after it became clear that something had to be done about the circumstance of borrowing from one bank to 'pay-off' the loans of another where there was no monies or assets available to satisfy the debts in the first place. One obvious consequence is a failure to pay creditors. Creditors file a bankruptcy petition against an individual or organization debtor ("involuntary bankruptcy") for several reasons.
Bankruptcy Basics provides basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of federal bankruptcy laws. It also provides individuals who may be considering bankruptcy with a basic explanation of the different chapters under which a bankruptcy case may be filed and answers some of the most commonly asked questions about the bankruptcy process.
The property a debtor can keep through the bankruptcy is determined by the specific exemptions available under state law. Bankruptcy Information allows you to search for state exemptions. In addition, residents of certain states are allowed to choose federal exemptions instead of state exemptions.
Implications of bankruptcy
- You lose control of your assets.
- You cannot obtain credit for over £250 without the permission from the lender.
- You cannot act as a company director.
- You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
- You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
- You may not practice as a Charted Accountant / Lawyer.
- You may not act as a Justice of the peace (JP).
- You may not become an member of parliament.
- You may not become a member of the local authority.
- Your credit is affected for many years after the annulment.
- You may be publicly examined in court.
The American Bankruptcy Institute (ABI)
The American Bankruptcy Institute (ABI) is the largest multi-disciplinary, non-partisan organization dedicated to research and education on matters related to insolvency. The ABI Canal Center Plaza membership includes more than 12,000 attorneys, auctioneers, bankers, judges, lenders, professors, turnaround specialists, accountants and other bankruptcy professionals providing a forum for the exchange of ideas and information.
ABI Online Resources provides members and the public with a one-stop reference to a wide array of resources, documents and commentary for bankruptcy and insolvency information. Providing both current and historical data, ABI’s Online Resources enables users to find answers to general or specific questions about bankruptcy law, activities or developments. Visit ABI: http://www.abiworld.org/