The Reality of Bankruptcy

The Reality of Bankruptcy """Bankruptcy is the legally declared inability or impairment of a person or organization to pay its debts. It allows debtors to be released from the obligation to pay the majority of their debts by submitting their non-exempt assets, if any, to the bankruptcy court for eventual distribution among their creditors.In addition to divorce, severe illness, disability, and the loss of a loved one, bankruptcy is one of the top five life-altering negative events that can occur. Since bankruptcy is not permanent, you may choose it as a means of eliminating your debts and starting over. Bankruptcy is the worst 'negative' you can have on your credit report, and it can have a lasting impact on your credit history. Bankruptcy protects you from your creditors and enables you to start over, but you must carefully consider all of its repercussions before deciding to file. Before filing for bankruptcy, investigate exhaustively the alternatives and options that may be available to you. You may also be required to explain why you are in debt in court.In recent years, for instance, the British government introduced the Individual Voluntary Arrangement (IVA), an alternative to bankruptcy. Moreover, the government is attempting to implement a simplified variant of the IVA known as the Simple IVA or SIVA.Debtors wishing to eliminate all debts must now wait eight years after their previous bankruptcy before filing again. In the United Kingdom (UK), bankruptcy applies only to individuals and partnerships (in a precise legal sense). And all debtors will be required to receive credit counseling prior to filing for bankruptcy.A bankruptcy proceeding is initiated by the submission of a petition containing the Debtor's financial details. Keep in mind that personal bankruptcy and bankruptcy for a business, corporation, or limited liability partnership have distinct requirements and require different filings and actions from you.By submitting their non-exempt assets, if any, to the jurisdiction of the bankruptcy court for eventual distribution among their creditors, bankruptcy releases debtors from their legal obligation to pay the majority of their debts. The court may declare you insolvent by issuing a ""bankruptcy order"" in response to a ""bankruptcy petition."" A debtor's petition can be obtained from your local county court for £150 plus a £310 deposit. Generally, bankruptcy petitions are filed with the High Court in London or the county court closest to your residence or place of business (though not all county courts accept bankruptcy petitions).Even with the greatest of intentions, declaring bankruptcy is sometimes inevitable.
If you are contemplating bankruptcy or are being threatened with bankruptcy, it is essential to obtain independent advice.

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