In this age of economic mishap, the situation for many large companies are not so good and some of them have so far filed bankruptcy and have gone broke. While it is quite some news about reading the losses and job cuts in these companies, I have never been quite sure of what happens when a company files bankruptcy and why they do that and a lot of similar questions.
I was looking for answers and found this website that contains a lot of information about filing bankruptcy and its advantages and disadvantages. I found most of things that I needed to know about how to file bankruptcy. It seems that any business/person can file for bankruptcy when he owes some money to creditors and can hence get a debt help option. There were much valuable content in the site and it had much more details that I was looking for.
According to the site, I learnt that there were two types of filing bankruptcy- chapter 7 bankruptcy and chapter 13 bankruptcy. It seems that chapter 7 bankruptcy is the preferred type of personal bankruptcy. Under chapter 7 bankruptcy, it is possible to discharge a consumer’s debt for free whereas in the case of chapter 13 bankruptcy, the consumer is required to pay off all or some of the debt over a period of time but one can include back payments on secured debts in this case. In 2005, new bankruptcy laws made it tougher to file to chapter 7 bankruptcy and imposed several limitations on the consumers as many would like to wipe the slate clean without paying the debt.
So far I have learnt a lot above bankruptcy and its effects and process and the next time when some company files for bankruptcy, I can actually know in detail what and how they did it rather than just knowing about it.
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