An Overview of Bankruptcy: What You Need to Know
Bankruptcy is often a measure resorted to by businessmen and entrepreneurs. One who is regularly employed by a company or establishments seldom files bankruptcy. That being the case, the demands for bankruptcy lawyers in Little Rock, AR and other urban areas are higher compared to their rural counterparts, since establishments naturally flourish in business centers. One has to note, though, that filing a bankruptcy requires less skill compared to other areas of the legal practice, as this process is basically a pro forma and does not require much of legal strategy.
Filing a bankruptcy is a last resort of a debtor. It is a means to give a person a clean slate and start over again. Bankruptcy is a judicial declaration. It is the courts that declare a person bankrupt. Hence, proceedings will take place once a person files bankruptcy.
Effects of Bankruptcy
Bankruptcy gives a person a clean slate, a new start. Once a person is declared bankrupt, the creditors are prevented from claiming against the debtor, as a rule. The discharge from the debts is one of the most immediate effects of bankruptcy. The mortgages of the person so declared are also held in abeyance. This means that the creditors can neither foreclose the properties subject of the mortgage. But, the lien on these properties remains, that is, the existing mortgage will stay annotated on the title of those properties. What is prevented is merely the foreclosure of these mortgages. Bankruptcy also entitles the debtor to repossess the properties that have already been taken by the creditor. This is especially applicable for cars that are usually purchased with a chattel mortgage. Another more practical effect of bankruptcy is that, it prevents disconnection of utility services of the debtor. Moreover, he also gets to keep whatever remaining cash is in his possession to help him start a new beginning.