When you are not in a position to meet your financial responsibilities, then you can be declared bankrupt. This is a legal position where the debtors can get out of their debts, and the creditors can get back as much of their money as possible. Both parties involved have to compromise such as debt forgiveness of the whole amount or part of it or revision of the terms of payment.
The main role of bankruptcy is to help the debtor be able to start on a new page and at the same time considering the issues facing the creditor. Therefore the question: Can Anyone file for Bankruptcy? arises. Lawyers will explain to you that anyone can, but the limitation is frequency at which they can do so. A person or company can file for bankruptcy once every six years.
There are two types of bankruptcy namely reorganization and liquidation. Liquidation means that officers, given the mandate by the court, sell all or some of your property and pay off your debts with the amount they get, whereas reorganization is where you reorganize yourself to pay your debts from your income. For the reorganization to be effective, the debtor must have enough income to keep paying the creditor. On the other hand, liquidation occurs when the debtor has few assets and low income. As there are no exemptions stated, this adequately answers the question: Can Anyone file for Bankruptcy?
Once you have been declared bankrupt, you can seek a revision of the terms of the debt to lower interest rates or the amount payable monthly. This will be beneficial to both the debtor and the creditor since the debt will be repaid but under more comfortable terms for the debtor. For a debt to be completely liquidated, you must earn below the average amount stated. As you file for bankruptcy, remember that giving false information can be termed as a criminal offence or the case will be disregarded completely.
Since the answer to the question: Can Anyone file for Bankruptcy? is a yes, you can use it to your advantage if you have too many debts. However, the disadvantage is that you will not be eligible for a loan for a long time. You may also not be eligible for certain contracts, transactions or jobs. More information on the same can be found at website.
