What is Bankruptcy – The Pros And Cons

What is Bankruptcy?

Bankruptcy is known as legal status of an individual or institution that no longer afford to repay any debts owed to creditors. The debtor initiates the bankruptcy process in most jurisdictions, which is imposed by court orders. It is important to note the fact that bankruptcy is not a synonym for insolvency. If you ask someone: what is bankruptcy? they might answer something about insolvency, but you need to be aware of this fact. In the United States, the term bankruptcy is only used for individuals, while the terms administration and liquidations are used for firms.

Any kind of insolvency proceeding is regarded as bankruptcy in the United States. Someone asking you the question of: “what is bankruptcy?” needs to know the etymology of the word bankruptcy. This word comes from an Italian term called banca rotta, which means “broken bench”. The term may be related to the custom of breaking the bench of a moneychanger in order to signify his insolvency. However, the term just might be a figure of speech to answer the question of: “what is bankruptcy?” Now it is time to talk about the history of bankruptcy to properly answer the question of “what is bankruptcy?”

When you are questioned of: “what is bankruptcy?” you need to tell the other party that the term bankruptcy did not exist in Ancient Greece. Creditors recouped their losses by forcing the man or woman who could not pay them back into what was known as “debt slavery”. It meant that they had to work for the creditor until the debt was fully paid off. However, many city-states in Ancient Greece limited this slavery to five years, and these debt slaves had protection for their lives and limbs, which were things that normal slaves did not enjoy.

What is bankruptcy? – More history to answer the question “what is bankruptcy?”

It has been shown that answering the question of: “what is bankruptcy?” is not difficult. It is important to understand that creditors in Ancient Greece could retain the slaves of debtors beyond the deadline of debt slavery. These slaves had to serve their new lord for the rest of their lives and sometimes endured harsher conditions. In the Old Testament, the Law of Moses mandated that all debts were canceled among the members of their community but not for foreigners.

They also used what was called the Year of Jubilee, which meant that all debts were canceled after 50 years including foreigners and debt slaves. The Qur’an teaches that debtors must enjoy a reasonable amount of time to pay off their debts to creditors. It is essential to say that today the focus of the insolvency process against institutions is not the elimination of the firm, but restructuring and remodeling its processes so as to allow the company to enjoy the continuation and rehabilitation of the business. This provides a solid answer to the question of: what is bankruptcy? Now that you know the answer to this important question, it is time to avoid this harsh situation. Bankruptcy is very harsh and you need to do what it takes to avoid it at all cost.

what is bankruptcyPrior to filing bankruptcy, it is crucial that you understand know different types of bankruptcy. It is feasible to buy and own new vehicle or house with loans while a Chapter 13 bankruptcy case stays active. However, there are some additional procedures which must be followed to make sure you are within the bankruptcy law. You must have a trustee and he or she must approve any your loans. show a planned financial budget that tells how you could possible take on the loan repayment and keep as current. You also need to be sure you have prepared a acceptable explanation as to why the new item you are buying is absolutely important and necessary.

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