Bankruptcy
Bad Debt Consolidation by splinder
Filed under Bankruptcy
Going bankrupt is one of the hardest things that a person or company can experience.
It means that you are unable to pay your debts to those entities who have lent you money - your creditors.
Going bankrupt is one of the hardest things that a person or company can experience.
It means that you are unable to pay your debts to those entities who have lent you money - your creditors.
Bankruptcy is a legal concept that was originally designed to allow creditors to seize the assets of debtors who could not pay their debts. It was first enacted as law in 1542 in England, during the Reign of Henry VIII. Debtors could also be sent to debtor jail, not a particularly pleasant place to go to.
Today, bankruptcy proceedings are managed by bankruptcy courts, who have the power to decide how to resolve outstanding debts. This may involve seizing debtor assets and granting them to creditors, as with the original law that favoured creditors almost exclusively. Bankruptcy has increasingly come to protect the interests of the debtor, however, and seeks where-ever possible to re-instate them as going concerns.
This means that solutions can also include writing off some debts, or re-structuring debts and payments such that the debtor can regain solvency.
There are 2 types of bankruptcy case.
A voluntary bankruptcy is one in which the debtor files for bankruptcy.
An involuntary bankruptcy, on the other hand, is petitioned for by creditors who have unpaid debts, and believe the debt is unable to pay them – or is unwilling, and needs an official nudge.