Archive for July 13th, 2010
July 13th, 2010 | 
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Bankruptcy is a legal process to declare the inability to pay debts. It can be declared by anyone, individual, business or organization. There are two most important bankruptcy chapters, chapter 7 and chapter 13. Bankruptcy is a difficult decision to make, and it is considered as the last financial aid to go with. It was not very popular previously because of after affect, but now people have started using as a tool to pay debts.
Bankruptcy chapter 7 is most popular chapter people file for. It is most common, simple and easily available chapter. It involves the liquidation of assets or property in order to pay creditors. Court has right to sell all valuable assets to recover the amount of creditors, and then distribute the same amount equally in creditors. Bankruptcy chapter 13 does not involve the liquidation of assets. It is a rehabilitation program provided by court to debtor. If debtor is earning good income, court asks him/her to pay the money accordingly.
Bankruptcy chapters have different rules and laws according to situation of debtors and creditors. Court provides proper counseling to debtor, if still they do not find any other way apart from bankruptcy; court allows them to go for it.
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