Benefits and Negatives of Bankruptcy Essay Example for Free

Benefits and Negatives of Bankruptcy EssayBankruptcy is briefly defined as a process in which debtor obtains reserve from his/her debts through the court. The relief varies in form and it includes full partial discharge of the debt or the nuisance of an imbursement plan consistent with the debtors financial means. (Larson, 2000) Types of failure vary according to its function. One of the most common types of bankruptcy is Chapter 7 or Straight Bankruptcy or Liquidation. This is also known as personalized Bankruptcy. Another is Chapter 11, which is primarily used by businesses. There is also Chapter 13 or Wage-Earner Bankruptcy. Finally, Chapter 20 bankruptcy is the process of filing of a Chapter 7 bankruptcy to discharge unsecured debts, followed by Chapter 13. (Larson, 2000) Because of the robberies and troubles with the call center, the call center might file bankruptcy, in which it has already owed the firm over $40,000,000. In this case, we atomic number 18 in tasked of finding the consequences of the call center filing bankruptcy. What are the benefits and negatives if the call center will file bankruptcy?Brown and Seeyle emphasized that bankruptcy is uncomplete a personal nor an emotional decision. Rather, it is a financial decision based on the amount of debt and the present ability to re wage debts. When the expected time dot of repayment exceeds the time it would take to rebuild credit, just like in the call centers case, then it is the time to consider bankruptcy. At this daub in time, the call center has accumulated more debt than they can be able to repay in the near future. The call center will peradventure benefit greatly from filing bankruptcy.This will be debt-free start. By filing bankruptcy, the call center has the chance to rebuild and re-establish their credit in line with the law. (Brown Seelye, 2008) Meanwhile, there is a widely held misconception of Bankruptcy in which Ben Franklin from Franklin Debt Relief explained, wher ein its the debtors version of the get out of jail free card in Monopoly. Most people know that bankruptcy affects credits for 7-10 years little did they know that they may have to pay back the debt any centering.Franklin stated the formal interpretation of bankruptcy as a proceeding in federal court in which an insolvent debtors assets are liquidated and the debtor is relieved of farther liability. It may also come out as the process of completing your debts for free. (Franklin, 2008) In this manner, the call center, even with bankruptcy, button up have to pay back mint of the debt. The call center, in any circumstances, may avoid filing bankruptcy. The most possible solution is that the Call centers assets be sold to recognize sufficient funds and later pay the firm.However, if the firm may prove that the call center has intentions of not paying the firm, then its the best way for the call center not to file bankruptcy. The call center will still have to pay the firm back. Chapter 7 Bankruptcy or immediately bankruptcy, a popular form of bankruptcy, permits the defaulter to start all over again. This is generally filed by those who have not any enough funds to pay for their debt. If the call center has no hope in paying their debts to the law firm, then they should file Chapter 7 Bankruptcy. However, this may ruin their credits and they will still be responsible for their debt.They will also pay attorneys who will work in the case. In this case, the call center may consider filing Chapter 13. As for chapter 13, it is the reorganization of an individual consumers debt with a new payment schedule. If the call center has assets they want to protect Chapter 13 is another way. However, Chapter 13 ruins the credit. It will remain on the call centers credit for up to 10 years. The call center, on another point, may have to consider credit counseling or a debt management agency. References Brown Seelye. The Decision to File. Washington State Law Firm.Retrie ved February 1, 2008, from http//www. brownandseelye. com/bankruptcy375/thedecisiontofile. html Franklin, Ben. Avoiding Bankruptcy Franklin Debt Relief. Retrieve February 1, 2008, from http//www. franklindebtrelief. com/avoid-bankruptcy. html Larson, Aaron. (2000). Bankruptcy Law An Overview. Law Offices of Aaron Larson. Retrieved February 1, 2008, from http//www. expertlaw. com/ library/bankruptcy/bankruptcy. html Chapter 13 and 7 Bankruptcies. American Bankruptcy Courts. Retrieved February 3, 2008, from http//www. bankruptcy-courts. net. /chapter-13. html