There are many reasons why an increasing number of people find themselves in financial difficulties so severe that they can no longer pay their debts. The global economy remains unstable, inflation is high and retrenchments are increasing at an alarming rate. Anyone in such a situation is under severe pressure from their creditors and even from their own families. In some cases, an application for bankruptcy in Chicago can provide some relief.
A chapter 7 or chapter 13 application for insolvency is not a straight forward affair. The court has to consider numerous issues. The applicant must explain why he became unable to honour his obligations. The finalization of applications can take up to six months and the applicant will have to cooperate fully or face charges. The best course of action is to appoint a lawyer to deal with the matter.
Far too many people think that insolvency is an easy and quick route out of financial obligations. This is most certainly not the case. The court will apply a means tests and if it is of the opinion that the applicant can pay the claimants, albeit at a reduced rate, it will refuse to grant the order. It is up to the applicant to convince the court that he cannot honour his obligations and that it is unlikelihood that his situation will improve.
The first step taken by the court will be to appoint a trustee. Trustees has broad powers and their main task is to ensure that the creditors are paid. To this end they normally liquidate the assets of the applicant by selling them on open auction. If the applicant is a business, he may decide to sell the business as a going concern or he may simply strip the business of its assets and close the concern down.
Many applicants are disillusioned when they find out that an insolvency order does not make their financial troubles disappear. This is simply not the case. Obligations such as back taxes, child support payments, secured loans and other debts cannot be set aside or cancelled by the court. All the applicant will be allowed to keep is some furniture, clothes and the tools of his trade, sometimes including his vehicle.
The importance of obtaining legal advice before filing for insolvency simply cannot be overemphasized. Once an insolvency order is issued by the court the life of the applicant will change dramatically. He will find it almost impossible to obtain financing and in some cases he may even lose his job. His family will have to lower their standard of living, sometimes drastically.
An experienced attorney will do everything possible to avoid filing for insolvency. In the majority of cases he will be able to negotiate with the creditors and reach an agreement on how the debt of the applicant will be paid. In some cases the attorney can even approach the court to order creditors to accept new payment schedules.
Far too many people end up in the insolvency court because they neglected to take action when they first realized that they are in trouble. It is imperative to get professional help immediately. In most cases a complete financial disaster can be averted but decisive action needs to be taken and the applicant will have to impose strict financial discipline.
A chapter 7 or chapter 13 application for insolvency is not a straight forward affair. The court has to consider numerous issues. The applicant must explain why he became unable to honour his obligations. The finalization of applications can take up to six months and the applicant will have to cooperate fully or face charges. The best course of action is to appoint a lawyer to deal with the matter.
Far too many people think that insolvency is an easy and quick route out of financial obligations. This is most certainly not the case. The court will apply a means tests and if it is of the opinion that the applicant can pay the claimants, albeit at a reduced rate, it will refuse to grant the order. It is up to the applicant to convince the court that he cannot honour his obligations and that it is unlikelihood that his situation will improve.
The first step taken by the court will be to appoint a trustee. Trustees has broad powers and their main task is to ensure that the creditors are paid. To this end they normally liquidate the assets of the applicant by selling them on open auction. If the applicant is a business, he may decide to sell the business as a going concern or he may simply strip the business of its assets and close the concern down.
Many applicants are disillusioned when they find out that an insolvency order does not make their financial troubles disappear. This is simply not the case. Obligations such as back taxes, child support payments, secured loans and other debts cannot be set aside or cancelled by the court. All the applicant will be allowed to keep is some furniture, clothes and the tools of his trade, sometimes including his vehicle.
The importance of obtaining legal advice before filing for insolvency simply cannot be overemphasized. Once an insolvency order is issued by the court the life of the applicant will change dramatically. He will find it almost impossible to obtain financing and in some cases he may even lose his job. His family will have to lower their standard of living, sometimes drastically.
An experienced attorney will do everything possible to avoid filing for insolvency. In the majority of cases he will be able to negotiate with the creditors and reach an agreement on how the debt of the applicant will be paid. In some cases the attorney can even approach the court to order creditors to accept new payment schedules.
Far too many people end up in the insolvency court because they neglected to take action when they first realized that they are in trouble. It is imperative to get professional help immediately. In most cases a complete financial disaster can be averted but decisive action needs to be taken and the applicant will have to impose strict financial discipline.
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