In case of bankruptcy, assets are taken over to pay off debts.
A debtor can be bankrupt
The guilty of money is called the debtor whereas the person who has a claim against someone else, that is, wants to pay, is called creditor. A company or person who is insolvent, that is, who can’t pay off his debts for a long period, may be bankrupt. The bankruptcy means that the assets are used and used to pay off the debts of the debtors’ creditors. Legal persons as well as natural persons may be bankrupt.
How is bankruptcy going?
It is either the debtor himself who applies for bankruptcy, through a so-called own application, or one or more of the creditors. A bankruptcy procedure is governed by official regulations. The bankruptcy manager’s responsibility is to hand over and make a list of the debtor’s assets and liabilities and to arrange the sale of the debtor’s property, the so-called bankruptcy estate. When a business contest ends, the company ceases to exist and can no longer be required for payment. On the other hand, a private individual may be required to pay even after the bankruptcy has ended.
What is the responsibility of the company owners for a bankruptcy?
Payment liability in case of bankruptcy varies depending on the company’s company form. In the event of a bankruptcy of a limited liability company, the owners are not liable for payment while the owners and / or associates of individual companies, trading companies and partnerships are personally liable for the company’s debts. This means that the owners’ private assets can be used to pay off the company’s debts.
Company reconstruction as an alternative to bankruptcy
Corporate reconstruction is an alternative to bankruptcy, which means that companies with financial problems, but who in the long term have the opportunity to survive, can be reconstructed without bankruptcy. Reconstruction is sought in court and means that the company is protected against bankruptcy for a specified period. As a rule, during the business reconstruction process, measurement of the company does not occur.
How to choose the best lawyer
Before someone chooses a bankruptcy company it is best to keep in mind the following tips:
* Don’t look for a bankruptcy company at the last minute. Quick decisions may be a bad choice and the chosen lawyer may not get enough time to prepare everything fully to continue the process.
* Spend the day in a bankruptcy court to get an idea of ??how things work and what you should get for a company that handles bankruptcy.
* Do not choose a company that handles bankruptcy just because it is the cheapest. It’s important to have an experienced bankruptcy company or lawyer such as Attorney Walter Benenati.
* Know how much the costs will be spent on the entire process from the bankruptcy company. Find out what is included in the attorney’s fees and what is not.
* Check the law firm, before you hire a bankruptcy lawyer. This will provide important instructions on how the lawyer will handle your case. When a debtor chooses a bankrupt company, it is important that they interview several companies before making a final decision. You must choose only certified and experienced bankruptcy companies.
* Visit the law office. Office assessments can provide important clues about how an attorney will handle your case. Look around the office and see how clean it is. You will not go to the doctor with a dirty examination room, do not hire a lawyer with an irregular office.
* Ask lots of questions. After you have several candidates in mind, ask them some questions. The answers to each of these questions are important, so if you get evasive answers, it might be a red flag that this is not the company for you.
Thank you for reading and we hope this article can give you new knowledge.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.
Leave a Reply