Bankruptcy is a legal process where individuals or other entities seek relief when they cannot clear their debts, and it is mainly imposed using a court order. This process starts when the debtor files a petition on behalf of creditors.
The debtor’s assets are evaluated and measured and can be used to clear the existing debt. Most bankruptcy cases are handled by federal courts, which have incorporated the latest technology to enhance the process.
Below we discuss the benefits of a tech-enabled bankruptcy process and how to dissolve your business with Goodbye Startup.
1. It Stops Creditors From Pursuing Further Action
Creditors are authorized to try collecting their debt, provided someone owes them money. There are various things creditors can do under the law, while they are also restricted to some. For instance, creditors can only contact the creditor during particular hours and are not allowed to send someone to threaten them—kindly contact experts as they know how to close a business fast.
Filing for bankruptcy using the latest technology stops all this harassment, and creditors are warned against emailing or calling the debtors. Instead, they must wait for the bankruptcy process to go through court before the final verdict is released.
In some instances, all of the debt, or a portion of it, might be required to be paid, but this depends on the debt.
2. Individuals Retain Most Of Their Property
Filing for bankruptcy does not always suggest that the creditor can take everything from the creditor. The process protects the creditor’s car and primary residence. This also applies to personal effects found in their home.
However, the creditor might try taking certain items like motorcycles and boats to satisfy their debt. Debtors should contemplate the type of bankruptcy they wish to file for and consult their lawyer for the best results.
3. It Gives Creditors Financial Freedom And New Beginnings
Most people file for bankruptcy mainly to get a fresh start. This is the most significant financial benefit these individuals face, but it also impacts their emotional and mental standpoints. People without credit cards are forced to plan for their future and live within their means. This adjustment is not always easy, but it becomes second nature with time.
Having a fresh financial start eliminates significant weight from your shoulders while providing you with the necessary tools needed for a bright future. Creditors can also use the acquired knowledge to avoid such situations later in life.
4. It Rebuilds Your Credit Score
Bankruptcy affects your credit score initially, and it might appear on your credit report for up to ten years. However, individuals who clear their debts and start afresh financially might be able to improve their credit scores with time.
5. Automatic Stay
Bankruptcy puts creditors in the automatic stay region, which stops creditors from asking for their debts. The above article has discussed ways to dissolve an LLC, and more information is available online.
There are various benefits of using a tech-enabled process when filing for bankruptcy, and the above article has discussed a few. Reach out to Goodbye Startup for more information.