Author: E-5-21-MKQ group Jo`rayeva Mohigul
Bankruptcy in business
What is Consumer Bankruptcy? - The Bankruptcy Code defines “consumer debt” as debt incurred by an individual primarily for a personal, family, or household purpose. 11 U.S.C. § 101(8).
- Not business debt.
- Can be chapter 7, 11, 12, or13
- Chapter 15 is available to individuals but a case under this chapter is not usually referred to as a “consumer case.”
- Bankruptcy ruins your credit and prevents you from getting a car loan, mortgage loan, credit card, etc. for up to 10 years.
- People can file for bankruptcy as many times as they want.
- Free House! (i.e. You don’t have to pay for your house (or car in bankruptcy.)
- You lose all your stuff: the reverse of the Free House myth.
- The discharge gets you out of all debt.
- You can choose what debts and what assets are in bankruptcy.
- You should buy lots of expensive things and take vacation right before you file since it will all be discharged anyway.
- Bankruptcy fixes your debt problems.
The “Debtors are Deadbeats” Myth - Medical debt, job loss, family emergencies all can lead to financial problems.
- Couple who owned a car dealership had a son badly burned in a house fire, which led to major financial problems for them and their business.
- Woman who quit job to take care of mother with Alzheimer's.
- Cancer diagnosis for debtor or family member.
- Small business fails and debtor personally guarantees loans.
The “Bankruptcy is bad for Business AND THE Economy” myth - “Capitalism without bankruptcy is like Christianity without hell.” This is a quote from Frank Borman, former astronaut and Chairman of Eastern Airlines.
- America’s culture and economy teaches us to take risks and in fact, depends on risk takers to be “job creators.”
- Without consumer bankruptcy, individuals would be saddled with debt for life, be unable to acquire more credit/debt, and, therefore, be unable to participate in the market.
Do'stlaringiz bilan baham: |
