Introduction
Over the past few years, many countries around the world have been hit hard by the economic downturn and in as much as some economies are recording growth albeit in small margins, many individuals and businesses are still going through a rough patch. During such times, the word most people dread most is bankruptcy. As a matter of fact, businesses opt for it as a measure of last resort but what is this bankruptcy all about? In this piece we look at law bankruptcy which is basically the law governing insolvency. Law bankruptcy has been around for quite a number of years now and the laws keep being amended to reflect the changing times.
History
One thing you need to know is that there are many forms of bankruptcy and in the past, those who were (or thought they were) about to go bankrupt used to go ahead and file for the same by themselves. That style of doing things has since been changed and countries like the US in 1995 amended the law bankruptcy. These days one cannot wake up one day declare themselves to be bankrupt. There are set benchmarks that he or she has to pass first in other words, they have to present their figures to an insolvency expert who will, after calculations, decide whether an individual is bankrupt. There is a section in bankruptcy law that explains in detail how the calculations are done. The law in subsequent sections also spells out various bankruptcy categories.
Features
Law bankruptcy is basically meant to help creditors and debtors reach an understanding that will be favorable to both sides. In as much as debtors are required to clear their debts, pushing them to pay up when they are not in position to do the same is not the best thing to do. Therefore the law is in place to protect debtors from the wrath of creditors, who in most cases are not very understanding. With the guidelines stipulated in the bankruptcy law, both parties work out a formula through which the debts will be cleared. The law has chapters on how to deal with bankruptcy in public agencies, business and small businesses and individual insolvency.
Conclusion
To conclude, if you are having a problem sorting your debts, law bankruptcy requires that you exhaust all avenues available to you before filing for insolvency. You are required to get in touch with an accredited counseling agent who will in turn look at your credit situation and try to come up with the best way to handle the situation. The law requires that you try other avenues for a period of at least six months before you are declared bankrupt. Once you commence the application process, you are required to contact a bankruptcy lawyer so as to get the necessary help as you go through the process. To make your bankruptcy status official, you have to get approval of the relevant court. All in all, the law will help you avoid a situation where you will lose everything you own to creditors.
