Everything You Need to Know About Bankruptcy

A man with spectacle on his hand reading the paper

Why is there bankruptcy at all? From previous experience in filing bankruptcies in Oklahoma, it can be informed that creditors who are owed cash tend to ask this question more often than debtors who try to discharge debt. The fact that an individual can go bankrupt file can be a very frustrating truth to the creditor owed cash. But for the individual in need of bankruptcy relief, the reason for bankruptcy is all too evident. You can consult an expert to know how to file bankruptcy in Oklahoma.

Sometimes the economic responsibilities of a person can become so burdensome that they get into an insuperable problem. Debts become irresistible that they become a kind of economic bondage that takes away a person's hope for future wealth and capacity to take care of his or her kids. From our experience as bankruptcy lawyers, we have discovered that none of customers want to file bankruptcy, and all of them want to have the economic ability to repay their debts; they've just reached a point in their life where it's impossible.

That's where bankruptcy goes in. The reason for bankruptcy is multi-faceted. First, bankruptcy serves to give new hope and a fresh start to a debtor. The U.S. Supreme Court has stated that this fresh start is the "essence of modern bankruptcy law" and that debtor is provided with special bankruptcy protections called exemptions to ensure that bankruptcy provides a fresh start.

From a more macroeconomic view, bankruptcy is an important component of any capitalist economy. Without bankruptcy, without knowing that if a company effort came south bankruptcy can serve as a safety hatch, what company person would ever take a danger? While it is evident that no one intends to file bankruptcy, bankruptcy itself offers for an invaluable safety net that will allow an individual to take the debts from the past and move forward into a brighter future.

Creditors

What's about the creditors?

While it is not immediately evident why bankruptcy would benefit creditors, they also have something in it. First, for the sake of this blog post, we must begin with the premise that an individual seeking to file a bankruptcy is out of economic possibilities.

That implies he or she has already sold the yacht and the private island and has already emptied the account of Swiss bank. Most bankruptcy debtors, if they are fortunate, usually have little more than their family furniture, their vehicle, and their home. No one gets compensated in complete, bankruptcy or not by the very fact of their position. So, before we suppose that bankruptcy is unfair to creditors, we must recognize that the option is unlikely to be much better, if any, at all.

With that comprehension, what bankruptcy does is equalize creditors' treatment, at least with specific categories. For instance, creditors are divided into at least three distinct groups: secured, priority, and non-priority, general unsecured. Suppose Ace Debt Collection Law Firm collects on a credit card owed to Goliath National Bank, and Ace Debt Collection Law Firm were more aggressive in its debt collection, pursued a debtor collection lawsuit, received a decision, and started to garnish the debtor's paycheck to the fullest extent permitted by law.

If you wish to know the other formalities and rules related to bankruptcy, contact Chris Mudd and Associates to know how to file a bankruptcy in Oklahoma.

** Disclaimer: This blog post does not constitute legal advice, nor does it create a client-attorney relationship.