There are many reasons why people land up in financial difficulties. People lose their jobs or are forced to spend all their savings on expensive medical treatment. Others are simply financially irresponsible and live beyond their means. Businesses may suffer due to rapidly changing markets. The list is endless but the fact remains that there are more and more people who simply cannot service their debt any longer. However, before applying for Chapter 11 bankruptcy Salinas citizens should think very carefully.
Anyone who thinks that being declared bankrupt is a quick and easy way of getting out of financial trouble is in for a very rude shock. Insolvency is a very serious matter and the courts do not easily entertain applications. They will first apply a means test to make sure that the applicant is indeed in serious financial trouble. The majority of applicants actually fail this strict means test.
Insolvency should at all times only be considered when all other options have been tried. It is a serious step and insolvent people struggle to get back on their feet. It is best to first approach the creditors and to try and negotiate a new payment plan. Most creditors will agree to this but the earlier they are approached the better. Many people may also qualify for loans that will allow them to pay their most urgent debts.
Once a decision is made to make an application for insolvency, it is important to realize that the process is drawn out, extremely stressful and even humiliating. Applicants will have to submit to the intensive and exhaustive scrutiny of the courts, they will have to submit an inventory of all their assets and they will have to explain all expenditure deemed unnecessary or luxurious.
If the court is finally satisfied that the applicant qualify for a hearing, it will appoint a trustee to oversee the matter. This trustee will not be tasked with assisting the applicant. His priority is to make sure that the claims of the creditors are met as far as possible. He will therefore confiscate the belongings of the applicant and auction them. They money will be given to the creditors and the applicant will not be left much.
Only once the trustee is satisfied that everything possible has been done to Satisfy the creditors will the court finally issue a discharge order. When this is done creditors may no longer make any claims. This does not mean the applicant goes debt free, however. He will still be liable to pay back taxes, support payments and secured loans. He will also have to enter a financial rehabilitation program.
Far too many forced into insolvency waited way too long before they acted on their troubles. Professional help should be obtained at the very first instance when it becomes clear that the financial burden is becoming unmanageable. Ignoring a problem never makes it disappear. If help is obtained at an early stage a rescue plan can almost always be formulated and implemented.
The responsible management of their personal finances is a grave responsibility of every individual. When trouble looms, steps should be taken immediately. Insolvency is not a quick and easy answer. In fact, it often creates more problems than it solves.
Anyone who thinks that being declared bankrupt is a quick and easy way of getting out of financial trouble is in for a very rude shock. Insolvency is a very serious matter and the courts do not easily entertain applications. They will first apply a means test to make sure that the applicant is indeed in serious financial trouble. The majority of applicants actually fail this strict means test.
Insolvency should at all times only be considered when all other options have been tried. It is a serious step and insolvent people struggle to get back on their feet. It is best to first approach the creditors and to try and negotiate a new payment plan. Most creditors will agree to this but the earlier they are approached the better. Many people may also qualify for loans that will allow them to pay their most urgent debts.
Once a decision is made to make an application for insolvency, it is important to realize that the process is drawn out, extremely stressful and even humiliating. Applicants will have to submit to the intensive and exhaustive scrutiny of the courts, they will have to submit an inventory of all their assets and they will have to explain all expenditure deemed unnecessary or luxurious.
If the court is finally satisfied that the applicant qualify for a hearing, it will appoint a trustee to oversee the matter. This trustee will not be tasked with assisting the applicant. His priority is to make sure that the claims of the creditors are met as far as possible. He will therefore confiscate the belongings of the applicant and auction them. They money will be given to the creditors and the applicant will not be left much.
Only once the trustee is satisfied that everything possible has been done to Satisfy the creditors will the court finally issue a discharge order. When this is done creditors may no longer make any claims. This does not mean the applicant goes debt free, however. He will still be liable to pay back taxes, support payments and secured loans. He will also have to enter a financial rehabilitation program.
Far too many forced into insolvency waited way too long before they acted on their troubles. Professional help should be obtained at the very first instance when it becomes clear that the financial burden is becoming unmanageable. Ignoring a problem never makes it disappear. If help is obtained at an early stage a rescue plan can almost always be formulated and implemented.
The responsible management of their personal finances is a grave responsibility of every individual. When trouble looms, steps should be taken immediately. Insolvency is not a quick and easy answer. In fact, it often creates more problems than it solves.
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