When considering how to handle your personal finances in the event that you become bankrupt, it is important to know what bankruptcy and debt settlement are. Bankruptcy is a lawful procedure through which entities or individuals who cannot pay their debts to creditors can seek relief from the courts. In most states, bankruptcy is usually imposed by a judge order, usually initiated by the debtor with the support of his attorney. However, it is important to note that in certain cases, the filing of such bankruptcy proceeding may be initiated by the lender, who has the initial rights to initiate proceedings for bankruptcy.
Bankruptcy and debt settlement, on the other hand, are different and often used in very different circumstances. When considering bankruptcy and debt settlement as options, it is important to remember that each option has its own pros and cons. Filing for bankruptcy protects creditors from receiving bad debts, garnishes their wages, and impairs their ability to collect from debts.
Bankruptcy and debt relief, on the other hand, are not a legal process; therefore, they carry different legal effects depending upon the jurisdiction in which the action is filed. In general, when an individual files for bankruptcy protection, this action is considered a full discharge of all legally acquired debts. Once the debtor has fulfilled his obligations and the case has been dismissed, this action does not prevent him or her from entering the workforce in the future.
Bankruptcy and debt relief, on the other hand, are not a legal process; therefore, they carry different legal effects depending upon the jurisdiction in which the action is filed. In general, when an individual files for bankruptcy protection, this action is considered a full discharge of all legally acquired debts. Once the case has been dismissed and the debtor has fulfilled his obligations and the case has been dismissed, this action does not prevent him or her from entering the workforce in the future.
There are several advantages that debtors can enjoy by using the bankruptcy and debt forgiveness programs. These include an immediate improvement on their credit scores and a possible decrease in their monthly payments. They can also request for an extension to pay back the balance. This is done through making a financial statement wherein all relevant information about their income and expenditures will be presented.
However, bankruptcy and debt forgiveness programs are not perfect. When debtors are unable to pay back the total amount they owe on time, creditors can take legal action against them. This could mean legal actions such as levies, attachment of property, repossession of assets, and even lawsuits. Creditors have the right to take these actions in order to recover at least a portion of the money that is owed. When you find yourself in deep debt, it is important that you seek immediate help and do whatever it takes to get out of the situation.
Look here for added details: https://en.wikipedia.org/wiki/Bankruptcy
