Few legal procedures can be as debilitating and as devastating as insolvency. Both businesses and individuals can find themselves in the unenviable position of losing everything and being stripped of all financial empowerment. It is incredibly traumatic to lose all possessions and assets. In the case of businesses, it is heartbreaking when the employees are told that they longer have a job and that the business is closed. Bankruptcy is most certainly a very serious matter and everything possible should be done to avoid things going that far.
When businesses file for insolvency, Chapter Seven of the Bankruptcy Act comes into play immediately. On receipt and provisional approval of the application, the court will move quickly and appoint a trustee. One of the first priorities will be to ensure that the business cease trading.
It is the responsibility of the trustee to conduct a thorough investigation into the affairs of the company and to determine the exact extent of its financial responsibilities. Trustees are empowered with extensive authority to enable them to perform their duties and they can make many decisions without consultation with anybody. It may be decided, for example, to auction the business, to close the business down and to sell the assets or even to keep the company running.
Individuals, too, are sometimes no longer able to honor their financial responsibilities and if there does not seem to be any chance of recovery. In such cases an application for a straight insolvency can be made. It would be a very big mistake, however, to make such an application in the belief that it would make all debt disappear.
Individuals may not realize it, but they will be stripped of all their possessions and everything will be sold to the highest bidder. Moneys raised in this manner are distributed to the various creditors. Even then certain responsibilities remain. Court imposed fines, taxes, active liens and child support, for example, will still have to be honored.
In the past, many people ruthlessly used the insolvency laws to shirk their financial responsibilities. This is no longer possible, thanks the means test. Courts will carefully investigate the income of applicants and compare that to their debt. If there is any chance that the debt can be dealt with, an order to attend credit counseling will be made and the application for insolvency will be thrown out of court.
Applicants often do not realize that how serious their responsibilities are once they have filed for insolvency. Detailed information regarding all aspects of the financial affairs of the applicant must be made available. Meetings must be attended to as scheduled and all requests for documentation and information must be obeyed without delay. Also, no new financial agreements may be made.
On top of these demanding circumstances, applicants will also face the ordeal of informing their creditors, their families and their employers or customers of the fact. They will have to be brutally honest throughout the entire process or they may face criminal charges.
Before submitting to this brutal and humiliating process, it is certainly worthwhile to first try every other possible option to try and rescue the situation. Many creditors are willing to renegotiate payments and debt counseling can do much to help individuals towards sensible debt consolidation or a consumer proposal. Truly, bankruptcy should be the very last resort.
When businesses file for insolvency, Chapter Seven of the Bankruptcy Act comes into play immediately. On receipt and provisional approval of the application, the court will move quickly and appoint a trustee. One of the first priorities will be to ensure that the business cease trading.
It is the responsibility of the trustee to conduct a thorough investigation into the affairs of the company and to determine the exact extent of its financial responsibilities. Trustees are empowered with extensive authority to enable them to perform their duties and they can make many decisions without consultation with anybody. It may be decided, for example, to auction the business, to close the business down and to sell the assets or even to keep the company running.
Individuals, too, are sometimes no longer able to honor their financial responsibilities and if there does not seem to be any chance of recovery. In such cases an application for a straight insolvency can be made. It would be a very big mistake, however, to make such an application in the belief that it would make all debt disappear.
Individuals may not realize it, but they will be stripped of all their possessions and everything will be sold to the highest bidder. Moneys raised in this manner are distributed to the various creditors. Even then certain responsibilities remain. Court imposed fines, taxes, active liens and child support, for example, will still have to be honored.
In the past, many people ruthlessly used the insolvency laws to shirk their financial responsibilities. This is no longer possible, thanks the means test. Courts will carefully investigate the income of applicants and compare that to their debt. If there is any chance that the debt can be dealt with, an order to attend credit counseling will be made and the application for insolvency will be thrown out of court.
Applicants often do not realize that how serious their responsibilities are once they have filed for insolvency. Detailed information regarding all aspects of the financial affairs of the applicant must be made available. Meetings must be attended to as scheduled and all requests for documentation and information must be obeyed without delay. Also, no new financial agreements may be made.
On top of these demanding circumstances, applicants will also face the ordeal of informing their creditors, their families and their employers or customers of the fact. They will have to be brutally honest throughout the entire process or they may face criminal charges.
Before submitting to this brutal and humiliating process, it is certainly worthwhile to first try every other possible option to try and rescue the situation. Many creditors are willing to renegotiate payments and debt counseling can do much to help individuals towards sensible debt consolidation or a consumer proposal. Truly, bankruptcy should be the very last resort.
About the Author:
In need of consumer proposal Ontario? Reclaim your financial future with the guidance of Doyle Salewski Inc. - Ottawa Credit Counsellors and Trustee In Bankruptcy 396 Bank Street, Ottawa, ON K2P 1Y5 (613) 237-5555.
0 comments:
Post a Comment