It is a historical fact that insolvencies increase when the markets are in trouble. The current global financial crisis is no different. Many thousands of people and businesses can no longer service their debt and in many cases it seems as if insolvency is the only viable solution. It is imperative to get help from a bankruptcy attorney in Fairhope AL when it becomes clear that the finances of the household or business are becoming out of control.
One of the first things a lawyer will tell a client is that insolvency is not a magic way to get out of financial troubles. There are lengthy and complex procedures to be followed and the process is stressful and even embarrassing. The main aim of the court hearings is to make sure that the applicant is not simply using the legal system to avoid his responsibilities.
As soon as an application is approved by the court, a trustee is appointed. This trustee is empowered to make decisions and to act in the interests of the creditors. In the case of individuals, all assets will most surely be confiscated immediately. The assets will be sold in order to raise funds to pay the creditors. Bank accounts will also be frozen and the funds will also be used to satisfy the demands of creditors.
In the case of enterprises the trustee has options. He may decide to close the business forthwith and to make all employees redundant. He may also decide to keep the doors open and to keep trading, but only if this is in the interests of the creditors. Eventually, the business may be sold as a going concern or the assets may be sold off at auction to honor the debts.
Before an application can be approved the courts first apply a means test. This test has been devised because so many people and businesses used to abuse the system simply to avoid their financial responsibilities. The purpose of the test is to determine whether the applicant can pay his debts, even if it has to be done on reduced installments. In such cases the court will appoint an administrator that will make sure that the applicant keeps to the arrangement.
Applicants are expected to provide full cooperation to the court appointed officials. They must supply any document demanded and they must be honest about their assets and their means. If they do not cooperate they can be charged or even arrested. It is in the best interest of applicants to comply with all demands made upon them. This will hasten the process and reduce the stress.
When in serious financial trouble it is very important to seek professional help immediately. A lawyer can help to deal with the stress of the situation by dealing with creditors and by negotiating on behalf of his client. In many cases a settlement can be reached without having to resort to the insolvency process. It is best to seek advice from a lawyer that specializes in this specific field.
It is very important to understand that insolvency is not the easy way out of financial difficulties. The penalties are severe and the consequences will influence the lives of applicants for many years to come. Before this step is taken legal advice should be obtained.
One of the first things a lawyer will tell a client is that insolvency is not a magic way to get out of financial troubles. There are lengthy and complex procedures to be followed and the process is stressful and even embarrassing. The main aim of the court hearings is to make sure that the applicant is not simply using the legal system to avoid his responsibilities.
As soon as an application is approved by the court, a trustee is appointed. This trustee is empowered to make decisions and to act in the interests of the creditors. In the case of individuals, all assets will most surely be confiscated immediately. The assets will be sold in order to raise funds to pay the creditors. Bank accounts will also be frozen and the funds will also be used to satisfy the demands of creditors.
In the case of enterprises the trustee has options. He may decide to close the business forthwith and to make all employees redundant. He may also decide to keep the doors open and to keep trading, but only if this is in the interests of the creditors. Eventually, the business may be sold as a going concern or the assets may be sold off at auction to honor the debts.
Before an application can be approved the courts first apply a means test. This test has been devised because so many people and businesses used to abuse the system simply to avoid their financial responsibilities. The purpose of the test is to determine whether the applicant can pay his debts, even if it has to be done on reduced installments. In such cases the court will appoint an administrator that will make sure that the applicant keeps to the arrangement.
Applicants are expected to provide full cooperation to the court appointed officials. They must supply any document demanded and they must be honest about their assets and their means. If they do not cooperate they can be charged or even arrested. It is in the best interest of applicants to comply with all demands made upon them. This will hasten the process and reduce the stress.
When in serious financial trouble it is very important to seek professional help immediately. A lawyer can help to deal with the stress of the situation by dealing with creditors and by negotiating on behalf of his client. In many cases a settlement can be reached without having to resort to the insolvency process. It is best to seek advice from a lawyer that specializes in this specific field.
It is very important to understand that insolvency is not the easy way out of financial difficulties. The penalties are severe and the consequences will influence the lives of applicants for many years to come. Before this step is taken legal advice should be obtained.
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