Taking loan is a common phenomenon followed from times immemorial. Be it an individual or a business house or a corporate sector, loans are taken, interest is paid and the loans are repaid. But it so happens that for various reasons, the repayments are defaulted. Frequent defaults cause inconvenience to the businessman. Now, the creditors start pressing for immediate repayment of loans. Legal notices are sent; bank representatives make frequent telephone calls or frequent visits. The businessman is under great stress, he is crestfallen. He is in a debt trap and feels that he is in a vicious circle because all his earnings are not enough to update the debts or pay the outstanding interest amount. At the same time his earnings are depleted. The best way to come out of this is to apply for bankruptcy.

Uses of bankruptcy application:

According to the procedure, the application for bankruptcy has to be filed through an attorney. It can be filed online as well. Normally, it takes considerable time to get the final orders on the bankruptcy application. As soon as the application is filed, the creditors would approach the appropriate agency making their claim. So harassment from the creditors is stopped. The appropriate legal forum will scrutinize the application and assess the repayment pattern over a period of time (normally it is ten years) and then decide on the application. Now the businessman is a relieved man because the creditors have stopped approaching him for repayment. Sometimes the jewelry or estates, furnishings in the house, etc. are set off against the loan. Normally, student loans are not waived off and the student is obliged to clear the loan after he secures a job.

What after bankruptcy application is accepted?

Now, the businessman has a clean slate to start with. He is free from the mess and can start his venture afresh. There is complete scope for him to re-establish himself in business. He will be entitled for fresh loans, of course on a limited scale. In short, a person should not feel hesitant to file the bankruptcy application. Instead he should make full use of the bankruptcy settlement and restart the venture.



Brian Joneta also writes about Bankruptcy and Credit issues including Declaring Personal Bankruptcy and Bankruptcy Lawyer

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