Experiencing severe financial difficulties can be extremely stressful. When every phone call or letter seems to be a demand for payment many people simply do not know where to turn. They end up in this situation because they lost their jobs or they had serious unexpected expenses. Sometimes they are just plain irresponsible. When realizing that they cannot cope any longer, many consider applying for insolvency. However, when asking the court for a Chapter 11 bankruptcy Salinas residents should know that they are in for a rough time.
Anyone who thinks that being declared bankrupt is a quick and easy way of getting out of financial trouble is in for a very rude shock. Insolvency is a very serious matter and the courts do not easily entertain applications. They will first apply a means test to make sure that the applicant is indeed in serious financial trouble. The majority of applicants actually fail this strict means test.
Financial experts all warn that applying for insolvency should always be the very last resort. In many cases there are other measures that can help those in dire financial straits to recover without having to go bankrupt. Creditors are often willing to negotiate new payment schedules because they know that in this way they are most likely to recover their money. It may even be possible to get a loan to pay off debt.
Applicants for insolvency will not only have to undergo a means test, but their entire financial lives will also be put under the microscope. They will have to explain their lifestyles, their extravaganzas and their expenditure. They will have to make an inventory of all their assets and submit it to the court. Their income will be scrutinized. The entire process is painful and often very humiliating.
If the court agrees to hear an application, it will immediately appoint a trustee. The job of this trustee is to do everything possible to raise the money demanded by the creditors of the applicant. To this end he may confiscate all the assets of the applicant and sell them on an open auction. All the money thus raised will be distributed among the creditors.
Only once the trustee is satisfied that everything possible has been done to Satisfy the creditors will the court finally issue a discharge order. When this is done creditors may no longer make any claims. This does not mean the applicant goes debt free, however. He will still be liable to pay back taxes, support payments and secured loans. He will also have to enter a financial rehabilitation program.
People in grave financial trouble often end up that way because they did not act in good time. At the first sign of trouble professional help should be sought. Ignoring these problems will certainly not help. Financial experts can help their clients to implement comprehensive debt relief programs that will not force them to go through the humiliation of insolvency.
The responsible management of their personal finances is a grave responsibility of every individual. When trouble looms, steps should be taken immediately. Insolvency is not a quick and easy answer. In fact, it often creates more problems than it solves.
Anyone who thinks that being declared bankrupt is a quick and easy way of getting out of financial trouble is in for a very rude shock. Insolvency is a very serious matter and the courts do not easily entertain applications. They will first apply a means test to make sure that the applicant is indeed in serious financial trouble. The majority of applicants actually fail this strict means test.
Financial experts all warn that applying for insolvency should always be the very last resort. In many cases there are other measures that can help those in dire financial straits to recover without having to go bankrupt. Creditors are often willing to negotiate new payment schedules because they know that in this way they are most likely to recover their money. It may even be possible to get a loan to pay off debt.
Applicants for insolvency will not only have to undergo a means test, but their entire financial lives will also be put under the microscope. They will have to explain their lifestyles, their extravaganzas and their expenditure. They will have to make an inventory of all their assets and submit it to the court. Their income will be scrutinized. The entire process is painful and often very humiliating.
If the court agrees to hear an application, it will immediately appoint a trustee. The job of this trustee is to do everything possible to raise the money demanded by the creditors of the applicant. To this end he may confiscate all the assets of the applicant and sell them on an open auction. All the money thus raised will be distributed among the creditors.
Only once the trustee is satisfied that everything possible has been done to Satisfy the creditors will the court finally issue a discharge order. When this is done creditors may no longer make any claims. This does not mean the applicant goes debt free, however. He will still be liable to pay back taxes, support payments and secured loans. He will also have to enter a financial rehabilitation program.
People in grave financial trouble often end up that way because they did not act in good time. At the first sign of trouble professional help should be sought. Ignoring these problems will certainly not help. Financial experts can help their clients to implement comprehensive debt relief programs that will not force them to go through the humiliation of insolvency.
The responsible management of their personal finances is a grave responsibility of every individual. When trouble looms, steps should be taken immediately. Insolvency is not a quick and easy answer. In fact, it often creates more problems than it solves.
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