Bankruptcy and Bankruptcy Filing Steps (Essay Sample)

Bankruptcy and Bankruptcy Filing Steps
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Bankruptcy has hit various companies in the past few years. Companies have declared an inability to raise funds that can sustain the healthy running of their business activities. Bankruptcy is a state through which a company is unable to repay its outstanding debts. The process of filing for bankruptcy begins with the filing of a petition by the debtor. The completion of the process is carried out in the Federal court as speculated in the U.S Bankruptcy Code of Chapter 7. The event in which a company files for bankruptcy establishes a fresh new beginning but hinders it from any borrowings as the records are retained on the company’s credit report for ten years. The process of bankruptcy follows various chronological procedures for a declaration by the Federal Court.[Alicia Touvila. “Bankruptcy Definition” (2020).]
The process begins with the debtors analyzing their debts. In chapter 7 of the U.S bankruptcy filing requirements, some debts are nondischargeable in the attempt of filing their bankruptcy state. For example, tax debts and student loans. Hence before setting up to file for bankruptcy, one should critically assess the nature of the debt. The second step involves the exclusion of the property you are entitled to keep as the law. For example, personal property like cars and houses may be excluded. The third step requires the debtor to determine the eligibility of the bankruptcy they intend to file for. According to chapter 7 bankruptcy law, the gross income recorded for the last six months must be lower than the median income accounted to your family and the scope of your state. The next step involves redemption, reaffirmation, or surrender of collateral property you declare to maintain. In this step, the debtor to redeems (pay the creditor for property he acquired in a lump sum) or reaffirm (keep the payment terms as per the original agreement) or surrender (allow the creditor to take back the property) the property he wanted to retain.[Stephen Elias and Patricia Dzikowski. Bankruptcy: Keep Your Property & Repay Debts Over Time. Nolo, 2016.]
Successful completion of the previous stages now gives the debtor access to filling the few pages of the bankruptcy form. He states in writing all of your property, income, loans, prior transactions, expenditures, and the list of names of your debtor as the prompts. Then you can now file the case and ready for the court hearing proceedings. Before submitting the form to the bankruptcy trustee, you first pay for the filing fee, in which you can app