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Bankruptcy 101 |
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by: Mansi
gupta |
‘Bankruptcy’ the term
that can raise the goose bumps of almost every individual who hears
it and even a nervous breakdown to those who confront it. Bankruptcy
stands for the situation when a person runs into huge debts and
there is hardly any money left with him to repay those debts. The
clouds of bankrupt situation can hover over anybody’s life be it a
successful business man who has never ever fathomed it or any
greenhorn entrepreneur who had thought of going a long way ahead.
There are several reasons behind this insolvency-
Indebtedness-people usually take big loans from the banks
and private companies in order to run successfully their business or
company. However, since the economy is constantly fluctuating, one
might not be able to incur expected results or profits. So, the loan
debt with interest rates gets piling on. The loan can also be taken
to pay off a bill that you missed paying. The loan is taken
instantly in this case without an assessment of the interest rates.
This can be cause snags later.
The credit card bills are
also a source of trouble. They are charged with good interest and at
the end of the month when the expenditure has chewed your month’s
income; the credit card bill can make you bite the dust.
In the world today where fraud and betrayals are
considered to be the bets virtues, any partner or shareholder or
director might connive to pitch the company or business to
bankruptcy. Here the reasons can be mutual squabbles and vengeance.
Gradual denouncement from the market- the commodity you sell
today at price X, may be sold tomorrow by some other company at a
much cheaper price Y. This can oust or eject your product from the
market replacing it with a relatively cheaper one.
However, where there is a will, there is definitely
a way. Just as there are two sides of a coin, there are two aspects
attached to everything. When you glare at the negative side of the
situation, its positive aspect is lurking behind according to which
bankruptcy can be seen a situation that provides you a golden chance
to start things afresh.
This is done by filing your
application for bankruptcy, in a way seeking help from the
government to help you overcome the disaster. Once you forward your
application and it is accepted, the government repays most of your
debts. This becomes possible by taking hold of your assets and
dividing them amongst the creditors in an organized manner. But the
debts that are associated with embezzlement or those huge ones that
cannot be covered up via one’s assets can be problematic. In case of
businesses filing for bankruptcy, certain procedure has to be
followed up.
Besides this there are a few debt consolidation
services that advertise themselves through television, print media
etc. Debt consolidation signifies using a loan provided by that
service to repay other debts. This loan is comparatively at a lower
rate of interest and it often becomes easier for many to repay one
loan instead of five to six ones.
In any case, if you are
seeking financial aid from the government, banks, services etc.,
there stands the barrier of qualification. It is that you should be
able to prove the service or the bank that your case is authentic
and not a fraud. In order to escape future troubles, the government
has formulated strict laws and eligibility criterion in this area.
However, in any case it is better to seek the advice of
an advisor before seeking help to make up your crisis. This will not
just educate you about all the related terms and conditions but also
the possible legal and financial consequences. Just keep in mind
that help always comes to those who are look for it with a true
heart.
About the author:
Mansi gupta writes about
bankruptcy Learn more at http://www.bankruptnomore.com
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