Everyone has heard of bankruptcy and, of course, everyone fears that they might get there if they’re not careful in their business. The truth is that the bankruptcy is actually a process that can help businesses or people pay the debts that they have under the protection of bankruptcy court. This process could also help them wipe their debts completely, and when you file any of these types of bankruptcy the creditors can no longer take any action against you to collect the debt from you if they don’t have the court approval.
If you plan to claim bankruptcy, it can remove or lower the debts that you owe, but keep in mind that this should be your last resort to use, because even if it does eliminate or reduce the debts, it has some consequences that you should always pay attention to.
The Types of Bankruptcy
The BK Lawyers and anyone else you might ask will tell you exactly the same thing – there are two types of bankruptcy that you can claim: reorganization or liquidation. If you choose liquidation, all the assets that you have will be sold to pay the debts that you owe your creditors. Once the sale takes place, and the creditors receive their money, they are not allowed to request anything else from you. However, the bankruptcy will remain in the history of your credit for several years, and nobody else will lend you money again.
If you choose reorganization, you will have to file a repayment proposal with the court. According to the south carolina injury attorney, the proposal will result in paying what you owe in different degrees – some debts you will pay in full, others you will pay partially while others won’t be paid at all. You will be able to use these plans for payment between three and five years.
Keep In Mind
There are some things that you have to pay attention to when dealing with this. Some debts cannot be forgiven through the process of bankruptcy. You won’t be able to skip over some debts. These are the debts that you have forgotten to put on the bankruptcy papers, the child support or the alimony, the debts that have incurred through injury or death that resulted from drunk driving, different types of student loans, the fines that were imposed for breaking the laws or any other tax debts that incurred.
It doesn’t matter if you have a bankrupt business for plumbing plus or personal bankruptcy problems because you should treat all with the same care. If you have claimed bankruptcy, the courts will garnish your wages and your creditors will receive the due payment, or at least what’s possible.
However, if you stick to the plans that the court has proposed you and you pay your debts in time, without delaying from month to month, when you’ve paid everything, you may have the surprise to find out that the creditors will still give you credit.
Even so, while you are still paying for this, there won’t be possible to get a new credit, because the bankruptcy will remain on your credit history for a long time.