If I declare that I am bankrupt, how will this affect me in the future for getting jobs? building a company? etc. Also curious as to the different types of bankruptcy. Thanks!
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The word "bankruptcy" is legal term used when a person or organization declares that they are unable to pay their creditors, or that their ability to do so is impaired. In most cases, the person or organization will declare bankruptcy voluntarily. However, in other cases, the person's or organization's creditors may request a declared state of bankruptcy. Declaring bankruptcy is intended to give the debtor a new start through debt-relief.
The word "bankruptcy" is legal term used when a person or organization declares that they are unable to pay their creditors, or that their ability to do so is impaired. In most cases, the person or organization will declare bankruptcy voluntarily. However, in other cases, the person's or organization's creditors may request a declared state of bankruptcy.
Why declare bankruptcy?
Bankruptcy laws were put into effect to help people or organizations overburdened by debt. The idea is that, by declaring bankruptcy, the debtor receives a new start when the debt-burden is relieved, and an opportunity to repay creditors (to the extent possible).
Many people in today's world find themselves overwhelmed by combined debt, accumulated through student loans, credit card debt, mortgages and the like. When no other option seems possible, bankruptcy may offer the only way back to a healthy financial situation.
Where did the term "bankruptcy" originate?
The term "bankruptcy" has several possible derivations. The first is from the Latin word bancus, meaning "table" or "bench", and the Latin word ruptus, meaning "broken".
Another possible derivation of "bankruptcy" is Italian. The first bankers did their business in public places, sitting on a bench at fairs and markets. Thus, the word "bank" comes from the word for bench. When the banker was not longer able to practice his business, he signified his inability to keep practicing by literally breaking his bench. (Hence the expression "that broke the bank"). Because such banking practices were common in Italy, the term "bankruptcy" is said to come from the Italian banco rotto, which also means "broken bench".
What happens when someone declares bankruptcy?
After division of "non-exempt assets" (which may include cash, personal effects, sporting goods and cars), debtors may usually be discharged of (that is, freed of) their debts, even if the debts have not been fully paid.
While the bankruptcy procedures are taking place, the debtor may not be the target of additional bankruptcy action by creditors when a "stay" is imposed by the court. In this case, the creditor is prohibited from taking wages, continuing with lawsuits or telephoning the debtor to demand payment.
In cases of bankruptcy, a Trustee must administer the debtor's estate. The Trustee (usually a lawyer) is appointed by a Bankruptcy Court and usually has experience in bankruptcy law. He or she receives payment as a portion of the remaining funds in the debtor's estate.
The option to declare bankruptcy may be used in an illegal fashion: The term "bankruptcy fraud" refers to a person or organization that files for bankruptcy with the intent of evading paying for goods or services when there are enough funds to do so.
What are the different types of bankruptcy in the US?
Bankruptcy cases in the US are filed in United States Bankruptcy Court, part of the US District Courts system. However, state laws concerning bankruptcy vary, and the validity of the claims and exemptions must be supported by state law.
Six forms of bankruptcy are defined under the Bankruptcy Code, which is located at Title 11 of the United States Code – these are:
- Chapter 7 - for an individual or a business; liquidation-style;
- Chapter 9 - municipal bankruptcy;
- Chapter 11 - primarily for businesses, but also for individuals with large assets and debts;
- Chapter 12 - for family farmers and fishermen; payment-plan or rehabilitation-style;
- Chapter 13 - for an individual with regular income; payment-plan or rehabilitation-style;
- Chapter 15 - ancillary and other "cross-border" situations.
Chapter 7 and Chapter 13 are the most common types of bankruptcy filed for individuals.
For more information about bankruptcy, visit these websites:
you have cover it all, well done
Such a long answer!
When you're in the middle of bankruptcy or facing it right now, it's like you're awake but you're experiencing nightmare. bankruptcy could be a disaster to your job, your marriage, and your peace of mind. Bankruptcy is not the place you want to visit. It's one of the life-altering events that leaves deep wounds to mental, emotional health and credit report along with divorce, disability and illness. Many job and loan applications ask if you ever filed bankruptcy that's why this could affect you're future jobs and building a company. But there are some local and multinational companies that hire employees according to their work ethics and find you sincere applying for their company.
These are just some of the types of bankruptcy: chapter 7, chapter 13, chapter 11 and chapter 12 bankruptcies. Chapter 7 is the most common but the most severe. A court-appointed trustee collects the individual's assets. Chapter 13 is also known as "individual reorganization", the debtor must settle his/her debts over 3-5 years. Chapter 11 is similar to chapter 13 bankruptcy but with more requirements. This is also targeted to larger businesses. Chapter 12 is a voluntary bankruptcy designed for farmers and fisherman with steady income. This type of bankruptcy allows the debtor to establish a plan to pay off all or part of his debts over an established period of time.
well when u go bankrupty pay the taxes or fill out a application form to direct address of town, name, personnel imformation requires bankrupty could be tranforming into court on your side or suitable to your lawyer who gave u by the goverment of the state or a theft could have it.
I do know tat depending on the job you go for!
If it's a place where you have to be bonded!
It can be used against you because it is believed that the person who filed for bankruptcy is considered a risk!! Plus! It will be on your credit rating for 10 yrs. Even after 10 yrs..
Credit rating companies do not get around to removing it!
Until you can re-establish credit!
You will be paying a higher interest rate on things you want!
I know a few people that have filed over the past several years. I thought of it myself once but never did it. I do know that while they say it is horrible on your credit, one of the people I know had a credit score of over 700 a few years after she filed for bankruptcy. I have seen on TV people trying to start businesses and investors found out they had filed so they would not help them out at all. (This was on Shark Tank :) ) Anymore I don't know if it's better to have a low credit score or to have bankruptcy.
stop copying and pasting but great answer make it easier to read by summarizing instead of putting in a long, boring explanantion, i thought it was wierd how people put sub-titles into their answers.