by Bob Tremerituus
Many commentators now think that the world economic downturn is past its worst point, although busineses are still uncertain as to what the future may hold. Whilst many people have lost their jobs during these difficult times, there is still a lag as the economy improves, so there is little doubt that the number of people claiming bankruptcy will increase.
Bankruptcy is open to both companies and businesses, and the two most common forms of bankruptcy are chapter 7 and chapter 13. Chapter 13 is often preferred by business, as it allows the company to carry on trading, if it is found that it is likely to have a long term future, despite its short term financial difficulties. A chapter 7 banktuptcy on the other hand, means that all assets are liquidated, preventing any form of continued trading.
By filing under chapter 13, one's credit rating, although severely damaged, is not as badly damaged as under a chapter 7 filing, and no personal or business assets are lost.
Because no assets are sold, a business can continue to trade, whilst looking to longer term success.
Unlike a chapter 7 bankruptcy, chapter 13 is basically a repayment plan, worked out by the court and with the agreement of the creditors, which aims to repay outstanding debts by rescheduling them over a 3-5 year period. Conditions can seem a little harsh, but the business stays afloat and looks forward to better times after the repayment period has been completed.
As long as the repayment plan is adhered to by the individual or business, the creditors may not pester the business or individual for payment.
Chapter 13 bankruptcy allows businesses to stay in business, and individuals to regain control of their financial affairs, without either having to sell of their personal assets. It also ensures that creditors a remunerated as far as possible, which generally means being paid in full unless the individual or business defaults on the repayment plan, unlike a chapter 7 bankruptcy, where the creditors merely get a proportion of the amount of money raised from the sale of the assets.
Before claiming any sort of bankruptcy however, proper financial advice should be sought to try and avoid this drastic step. - 41115
Before (http://www.declaringyourselfbankrupt.org) declaring yourself bankrupt, it's extremely important that you consult with professional adviser about your financial position. This is because (http://www.declaringyourselfbankrupt.org) declaring yourself bankrupt has serious consequences for you credit rating and general financial position in later life.
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New Unique Article!
Title: Some Facts Regarding Chapter 13 Bankruptcy
Author: Bob Tremerituus
Email: ntoulson@googlemail.com
Keywords: Liquidation,Bankruptcy,Financial situation,money,assets,cash,credit,loans,credit cards
Word Count: 361
Category: Finance:Credit
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