People who have debts can declare bankruptcy and get a new beginning through liquidation or reorganization. Specific debts can be discharged by the bankruptcy proceedings in both cases. The debt collector can no longer speak up against the borrower, like trying to collect payment or seizing any collateral, once the loan has been expelled. However, not all loans can be discharged, and some are exceptionally hard to discharge.
Is It Possible for a c to Be Denied by the Courts?
It's possible. The majority of personal debtors are discharged under Chapter 7. The entire bankruptcy situation may be rejected if the court determines that individual hidden money or even other resources, fraudulently acquired assets that must have been used to repay loans, or otherwise violated the rules.
Business Debt and Bankruptcy
You can release the following types of debts in bankruptcy Chapter 7:
- bills from credit cards
- a few court rulings
- medical expenses
- a sole proprietor's unprotected debts
- obligations arising from sole proprietorship leases and agreements
Debts that are secured are handled differently. If you don't pay your bill, the creditor can seize the collateral used to secure the loan, even though you declare bankruptcy.
Personal Bankruptcy and Business
In Chapter 7 bankruptcy, some forms of debt are not dischargeable.
Non-dischargeable debts include:
- back child benefit and alimony
- court-ordered fines, punishments, and restitution
- assumptive fraud
- student loans only if paying back them is a severe hardship
- debt incurred as a result of potential fraud
A bankruptcy Chapter 7 may stay on the credit reports for ten years, while a Chapter 13 bankruptcy will stay on the credit file for seven years. This can make borrowing money at some point, like for a home loan or car loan, or obtaining a credit card, more costly or even impossible. It will have an influence on insurance rates. You can contact Fong Law Firm if you residing near Monterey Park California and surrounding areas.
So, before filing bankruptcy, you should look into other alternatives for debt relief. Debt relief usually entails negotiating with the lenders to make the debts more tolerable, like lowering interest rates, canceling a part of the debt, or extending the repayment period.
The Impact of Bankruptcy on Investors
No one expects a company to go bankrupt when they invest in it, whether through equities or debt equipment. Once you venture beyond the risk-free domain of government-issued equities, you understand this additional risk.
When a company files for bankruptcy, its equities typically continue to trade, albeit at very low prices.
Shareholders are even further down the ladder during Chapter 7. Usually, a business's stock becomes valueless during the Chapter 7 trial, and shareholders lose all their money. You may even get a fraction of the full price of a bond unless you hold one. What you'll get is determined by the number of investments available for allocation.
Secured lenders have a better chance of recovering their preliminary investments' value. Before receiving any compensation, unprotected creditors should wait until protected creditors have been properly compensated. Stockholders generally get very little, if anything at all.
Call Fong Law Group at (626) 289-8299 for a FREE consolidation, and talk to an attorney today. We are here to help you get through this difficult time in your life, and help you with a Fresh Start.