The number of people that find themselves in financial difficulties so severe that they are no longer able to service their debt increases every year. A weakened economy, retrenchments and big fluctuations in the exchange rate all contribute to this sad state of affairs. In many cases there is no option other than to approach the courts for relief. With help from a bankruptcy attorney Washington DC applicants can avoid the severe stress of this process.
Both businesses and individuals are allowed to make applications in terms of chapter 7 and 13. Applicants have to understand, however, that the courts are very strict and that liquidation orders are not granted before the financial affairs of the applicant has been investigated thoroughly. The criteria are strict and it is best to rather hire the services of a lawyer that specializes in this field.
It is a very big mistake to think that a liquidation order is a convenient way of getting rid of debt. This is not so. The court has the interest of the debtors at heart and it needs to be convinced that their is no way in which the applicant can honour his obligations. The court will also apply a means test and may order a rescheduled payment plan rather than granting a liquidation order.
If the court agrees to review an application it will immediately appoint a trustee who will be tasked with liquidating the estate of the applicant. All the assets of the applicant is immediately forfeited to the trustee. He will sell the assets and distribute the money thus raised between the debtors. When the applicant is a business he may decide to sell the business or to just close it and sell the assets.
Even when an application is granted all the debts of the applicant do not disappear. Certain financial obligation remain valid even when a liquidation order has been granted. Taxes, child support payments and secured loans remain the responsibility of the applicant. However, the applicant is normally allowed to keep some basic possessions such as a car.
When a lawyer accepts a case he will first ensure that his client fully understand and accept the ramifications of an application for liquidation. The applicant must know that his credit record will be ruined and that he will not be able to obtain financing for a minimum period of ten years. He will have to conduct his life according to a strict budget and during his rehabilitation period his financial affairs can be scrutinized at any time.
The lawyer will also advise his client to consider alternatives to liquidation. Debtors know that they will suffer losses if the court grants an application. They are therefore often willing to come to a new payback agreement with the lawyer. The lawyer can can help his client to consolidate his debts and pay a single amount each month which will be distributed by the lawyer.
Liquidation should be avoided if it is at all possible. It is unfortunate that so many people and businesses only seek help from a lawyer when the situation has deteriorated to the point where liquidation is the only option. A lawyer should be consulted as soon as it becomes clear that there are financial difficulties. The sooner action is taken the better.
Both businesses and individuals are allowed to make applications in terms of chapter 7 and 13. Applicants have to understand, however, that the courts are very strict and that liquidation orders are not granted before the financial affairs of the applicant has been investigated thoroughly. The criteria are strict and it is best to rather hire the services of a lawyer that specializes in this field.
It is a very big mistake to think that a liquidation order is a convenient way of getting rid of debt. This is not so. The court has the interest of the debtors at heart and it needs to be convinced that their is no way in which the applicant can honour his obligations. The court will also apply a means test and may order a rescheduled payment plan rather than granting a liquidation order.
If the court agrees to review an application it will immediately appoint a trustee who will be tasked with liquidating the estate of the applicant. All the assets of the applicant is immediately forfeited to the trustee. He will sell the assets and distribute the money thus raised between the debtors. When the applicant is a business he may decide to sell the business or to just close it and sell the assets.
Even when an application is granted all the debts of the applicant do not disappear. Certain financial obligation remain valid even when a liquidation order has been granted. Taxes, child support payments and secured loans remain the responsibility of the applicant. However, the applicant is normally allowed to keep some basic possessions such as a car.
When a lawyer accepts a case he will first ensure that his client fully understand and accept the ramifications of an application for liquidation. The applicant must know that his credit record will be ruined and that he will not be able to obtain financing for a minimum period of ten years. He will have to conduct his life according to a strict budget and during his rehabilitation period his financial affairs can be scrutinized at any time.
The lawyer will also advise his client to consider alternatives to liquidation. Debtors know that they will suffer losses if the court grants an application. They are therefore often willing to come to a new payback agreement with the lawyer. The lawyer can can help his client to consolidate his debts and pay a single amount each month which will be distributed by the lawyer.
Liquidation should be avoided if it is at all possible. It is unfortunate that so many people and businesses only seek help from a lawyer when the situation has deteriorated to the point where liquidation is the only option. A lawyer should be consulted as soon as it becomes clear that there are financial difficulties. The sooner action is taken the better.
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