Bankruptcy is a remedy for those whose financial resources can no longer keep up with their existing costs and expenses. Individuals and businesses may both end up suffering from such financial distress that they end up having to file for bankruptcy.
How does it work?
As a legal remedy, an officially recognized state of bankruptcy essentially lets someone restructure their finances first, without being hounded by their creditors. More often than not, a person in great debt finds it all the more difficult to address their pressing financial concerns because their creditors keep on hounding them, penalizing them with increasing interests, and threatening them with legal suits for failure to pay.
These, of course, do not make the situation any easier on the debtor, who then ends up incurring more debt and stress in their attempt to take care of the situation. With bankruptcy as a remedy, the creditors are basically prohibited from forcing the debtor to pay—at least until they have put their affairs in order.
Bankruptcy Complications
Things become even more complicated when there is a spouse and children involved. For example, you are a divorcee tasked to pay alimony and child support. Even though you file for bankruptcy with the help of your lawyer, this does not mean that you are relieved of these responsibilities to your family.
If you are just trying to wiggle out of these, therefore, you’re better off looking for another kind of remedy, and not use bankruptcy.
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