Bankruptcy is a common phenomenon and many people all around the world are filing for it to protect them from the harassing phone calls of their lenders.
Bankruptcy is considered the most traditional and old way for getting rid of debts.
No doubt that filing for bankruptcy will help the person in getting rid of debts in a very short span move of time but, a person really has to bear many problems and difficulties in the long run.
The decision of bankruptcy creates extremely negative impact on the person's credit ranking and this impact will be remain on the credit report for the time frame of seven to ten years and in between this time, a person is not liable to take any sort of financial aid from any bank or financial institution.
It is always suggested to consider bankruptcy as the last resort and think to file for it only when all the other options of debt relief fail to bring out the desired results.
In short, it is not wrong to say that filing for bankruptcy is considered more of like an emotional decision rather than a practical and sensible one.
Bankruptcies are of two types voluntary and involuntary the following article is enough to help the person in making difference between both types of bankruptcies.
Voluntary bankruptcy.
The creditor's voluntary insolvency is just like personal bankruptcy, this type of liquidation particularly deals with insolvent business.
When the business situation is no longer good and the market prices of the shares start losing their value, then at this stage, the company's directors decide that are going to stop the business and liquidate the company's assets.
The process of voluntary bankruptcy is not at all considered difficult and complicated.
The first step taken by the directors is to call up the meeting and let all the shareholders know about the insolvency of business.
After that, they tell them completely that it is financially irresponsible for them to accept anymore credit from their creditors.
After this meeting, the actual process of voluntary liquidation starts.
All the assets of the company is sold and afterwards, the company pays back all the liabilities.
Involuntary bankruptcy.
Involuntary means Forced bankruptcy.
In this type of insolvency, the lenders can force the borrowers for filing of insolvency.
The borrowers in this bankruptcy are given a chance to either liquidate or recognize.
Such type of insolvency is not common and it only happens when a person is not paying the amount of bills on regular monthly basis for a longer period of time.
Bankruptcy is considered the most traditional and old way for getting rid of debts.
No doubt that filing for bankruptcy will help the person in getting rid of debts in a very short span move of time but, a person really has to bear many problems and difficulties in the long run.
The decision of bankruptcy creates extremely negative impact on the person's credit ranking and this impact will be remain on the credit report for the time frame of seven to ten years and in between this time, a person is not liable to take any sort of financial aid from any bank or financial institution.
It is always suggested to consider bankruptcy as the last resort and think to file for it only when all the other options of debt relief fail to bring out the desired results.
In short, it is not wrong to say that filing for bankruptcy is considered more of like an emotional decision rather than a practical and sensible one.
Bankruptcies are of two types voluntary and involuntary the following article is enough to help the person in making difference between both types of bankruptcies.
Voluntary bankruptcy.
The creditor's voluntary insolvency is just like personal bankruptcy, this type of liquidation particularly deals with insolvent business.
When the business situation is no longer good and the market prices of the shares start losing their value, then at this stage, the company's directors decide that are going to stop the business and liquidate the company's assets.
The process of voluntary bankruptcy is not at all considered difficult and complicated.
The first step taken by the directors is to call up the meeting and let all the shareholders know about the insolvency of business.
After that, they tell them completely that it is financially irresponsible for them to accept anymore credit from their creditors.
After this meeting, the actual process of voluntary liquidation starts.
All the assets of the company is sold and afterwards, the company pays back all the liabilities.
Involuntary bankruptcy.
Involuntary means Forced bankruptcy.
In this type of insolvency, the lenders can force the borrowers for filing of insolvency.
The borrowers in this bankruptcy are given a chance to either liquidate or recognize.
Such type of insolvency is not common and it only happens when a person is not paying the amount of bills on regular monthly basis for a longer period of time.
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