The number of people that find themselves in financial difficulties so severe that they are no longer able to service their debt increases every year. A weakened economy, retrenchments and big fluctuations in the exchange rate all contribute to this sad state of affairs. In many cases there is no option other than to approach the courts for relief. With help from a bankruptcy attorney Washington DC applicants can avoid the severe stress of this process.
Both individuals and companies can file in terms of either chapter 7 or chapter 13. It is not just a matter of filing for insolvency, however. The process is lengthy and the court has to consider many criteria before it will grant an order in favour of the applicant. It is a stressful and emotional process and those that are in this unfortunate situation is best off by hiring a lawyer to handle the matter.
It is a very big mistake to think that a liquidation order is a convenient way of getting rid of debt. This is not so. The court has the interest of the debtors at heart and it needs to be convinced that their is no way in which the applicant can honour his obligations. The court will also apply a means test and may order a rescheduled payment plan rather than granting a liquidation order.
As soon as a court receives an application a trustee is appointed to manage the entire process. The trustee is given wide powers. If the applicant is a business, the trustee may close the business and sell all the assets or he may sell the business as a going concern. In the case of individuals all their assets are sold on open auction and the proceeds will be distributed between the debtors.
Even after a liquidation order is granted the applicant is not freed from all financial obligations. He will still have to pay his taxes and he will remain responsible for paying support. Secured loans are not cancelled by a liquidation order either. On the other hand, at least the applicant will be allowed to keep the tools of his trade and other assets deemed important to maintain a basic lifestyle.
When a lawyer accepts a case he will first ensure that his client fully understand and accept the ramifications of an application for liquidation. The applicant must know that his credit record will be ruined and that he will not be able to obtain financing for a minimum period of ten years. He will have to conduct his life according to a strict budget and during his rehabilitation period his financial affairs can be scrutinized at any time.
Before the lawyer proceed with the application he will help his client to explore all the alternatives. In many cases it is possible to reach new agreements with debtors. Debtors know that they will lose money if the client is liquidated and they are often rather willing to agree to a new payment schedule over a longer period. The lawyer will then proceed to consolidate the debt of his client.
Far too many people land up in the bankruptcy court because they fail to manage their personal finances and they incur debt by buying unnecessary luxuries. It is vital to have a sensible budget and to live according to that budget. When trouble does occur, however, it is important to get professional help from an experienced lawyer immediately.
Both individuals and companies can file in terms of either chapter 7 or chapter 13. It is not just a matter of filing for insolvency, however. The process is lengthy and the court has to consider many criteria before it will grant an order in favour of the applicant. It is a stressful and emotional process and those that are in this unfortunate situation is best off by hiring a lawyer to handle the matter.
It is a very big mistake to think that a liquidation order is a convenient way of getting rid of debt. This is not so. The court has the interest of the debtors at heart and it needs to be convinced that their is no way in which the applicant can honour his obligations. The court will also apply a means test and may order a rescheduled payment plan rather than granting a liquidation order.
As soon as a court receives an application a trustee is appointed to manage the entire process. The trustee is given wide powers. If the applicant is a business, the trustee may close the business and sell all the assets or he may sell the business as a going concern. In the case of individuals all their assets are sold on open auction and the proceeds will be distributed between the debtors.
Even after a liquidation order is granted the applicant is not freed from all financial obligations. He will still have to pay his taxes and he will remain responsible for paying support. Secured loans are not cancelled by a liquidation order either. On the other hand, at least the applicant will be allowed to keep the tools of his trade and other assets deemed important to maintain a basic lifestyle.
When a lawyer accepts a case he will first ensure that his client fully understand and accept the ramifications of an application for liquidation. The applicant must know that his credit record will be ruined and that he will not be able to obtain financing for a minimum period of ten years. He will have to conduct his life according to a strict budget and during his rehabilitation period his financial affairs can be scrutinized at any time.
Before the lawyer proceed with the application he will help his client to explore all the alternatives. In many cases it is possible to reach new agreements with debtors. Debtors know that they will lose money if the client is liquidated and they are often rather willing to agree to a new payment schedule over a longer period. The lawyer will then proceed to consolidate the debt of his client.
Far too many people land up in the bankruptcy court because they fail to manage their personal finances and they incur debt by buying unnecessary luxuries. It is vital to have a sensible budget and to live according to that budget. When trouble does occur, however, it is important to get professional help from an experienced lawyer immediately.
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