|mnplslawyers (mnplslawyers) wrote,|
@ 2012-12-22 07:16:00
|Entry tags:||minneapolis lawyers|
How Bankruptcy Can Affect Your Life After The Judgement
Bankruptcy according to Minneapolis lawyers is a state where an individual or a firm is unable to pay the debts due to their insolvency. In that case, for one to be declared bankrupt there must be solid proof that the one involved cannot be able to clear the debts. It is made legal when the creditor discovers that the debtor is unable to pay him the amount due and files a creditor's petition with the official receiver. Bankruptcy law on the other hand comes into place to help the debtor in apportioning his assets to creditors in order to clear the debts owed to them. In that case, a plan is developed to resolve these debts accordingly.
Bankruptcy law also allows some debtors to free themselves from their financial liabilities even before their debts are fully cleared. This is made possible in case of unsecured creditors. Once a person or an organization is declared bankrupt, they are required to produce a statement of affairs document indicating the required information about their assets and liabilities. This helps to settle the debts owed to the creditors systematically. Failure to produce this document in due time by the debtor, will lead to either a fine or prosecution by the court of law. The debtor however can file a petition against the claim that he or she is bankrupt.
A statement of affairs Minneapolis lawyers consist contains liabilities owed to the creditors and the order into which they should be cleared. The preferred debts, which include rent, salaries to employees, are the ones which are given the first priority in their settling. They are followed by the secured debts, partially secured debts and finally the unsecured debts owed to the creditors. This helps to provide a plan in which the debts should be settled. After the presentation of the statement of affairs by the debtor, a trustee is appointed to take over the operations of the bankrupt's estate.
In that case, the trustee acts as the link between the debtor and the creditors. He is responsible for informing the creditors of the whereabouts of the debtor's estate and matters arising. In addition to that, the trustee ensures that the bankrupt under the bankrupt act, complies with his duties as provided. The trustee is also expected to carry out investigations on the bankrupt's financial affairs and realizing of funds to which the debtor is entitled to. It is the duty of the trustee to distribute dividends to creditors in case sufficient funds become available in accordance with the bankruptcy law.
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