Bankruptcy – What Is It And Who Does It Affect?
Bankruptcy is one of those terms that most people have heard and probably feel they know a lot about. The law can be complicated so making assumptions can be dangerous. Knowing the facts can help prevent problems and may even save you money, time and stress.
In simple terms, bankruptcy is a situation where a borrower can no longer meet the repayments on their loans. This means anyone who has a loan, whether it is an individual or a large corporation, become bankrupt. The law on bankruptcy is uniform and controlled by US Congress.
Although the law is uniform across the country, it is not uniform when it comes to individual cases. For individuals, employment, assets and the number of dependents can affect the bankruptcy process. For businesses, the type of entity and the obligations placed on shareholders can affect the process.
Bankruptcy law is interesting in that it has two objectives. Naturally, one objective is to return as much as possible to creditors. However, the second objective is just as important. This objective is to provide those that find themselves in unfortunate situations a way to move on with their lives unencumbered with past crippling debts.
If you really are bankrupt – the system will work with you to repay as much as possible, wipe away the balance, and allow you to start afresh. On the flip side, those that abuse the system and make fraudulent bankruptcy claims can find themselves in a lot of trouble.
We will cover all the processes of bankruptcy through this blog in order to help you avoid the pitfalls. However, this is not legal advice and, should you find yourself in a situation where bankruptcy is a real situation, seek advice from those qualified to give it. The law is constantly evolving – what is fact today may be changed tomorrow – so get up to date advice.
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June 18th, 2011 at 1:16 pm
my mother in law filed for bankruptcy and put my daughter who is 9 months old myself and my husband as her dependants, she says if we make over 400 $ a month we have to help pay her debt by law i dont believe her. is this true?
because i dont find it right or fair that i have to pay for her debt that she carelessly put herself into.
June 19th, 2011 at 4:19 am
Maryella, thanks for your question. Unfortunately, we are not lawyers so we cannot give legal advice. I would encourage you to seek legal aid to sort out your problem, and I wish you the best of luck.