What is voluntary bankruptcy?
Voluntary bankruptcy is a deliberate decision of the debtor who will legally declare that he is no longer able to pay an outstanding debt. With this type of voluntary proceedings, the debtor initiates the action for bankruptcy by seeking protection against court against creditors. Usually there is a period when creditors are informed and the claim is investigated by the court. In time, he decides to approve or reject the bankruptcy application.
The debtor's decision on a voluntary bankruptcy statement differs from the process of involuntary bankruptcy. In this scenario, they are creditors who monitor the legal means for an individual or a business entity to declare bankruptcy in an effort to have the assets entertained and sell to partially settle the outstanding debt. If the creditors initiate the bankruptcy process, the debtor usually has to prove why the action should not be approved or prove the reasons why specific assets should not be sold to compensate for part of the debt.
In general, debtors consider voluntary bankruptcy only in situations where there seems to be no other viable solution. In some cases, financial problems that have led to a decision to submit bankruptcy caused by a lengthy disease, huge accounts in the hospital, divorce or longer unemployment. However, the state may have its origin in the fact that it does not regulate the loan and other assets in a responsible way. In all situations, the final goal is to eliminate debt and allow individuals to do a new beginning.
Depending on laws governing involuntary and voluntary action actions in a given country, the debtor may be able to maintain certain assets. For example, many countries allow the debtor to adhere to assets that are considered necessary to make a living. In some areas of the world, it may also be possible to omit the primary residence of the family from the activation must be sold to partially satisfy the creditor's demands. There may be some types of loans such as a mortgage, axVobozena from inclusion in a debt that will be settled by bankruptcy.
Because there is a large scattering between how bankruptcies are processed in various jurisdictions, it is essential that anyone decides to seek legal advice. A qualified lawyer may inform the client about what he can and cannot include in the event, what assets are subject to sale to partial debt compensation and what type of bankruptcy action would be in the best interest of the client.