1. The company's debts were too much to bear.

STRATEGIC PLAN:

Filing bankruptcy is a debt restructuring strategy, not an end of the business. A law on
bankruptcy is in force to aid individuals who have borrowed unmanageably – typically
because of significant medical bills or other unexpected expenses that are not their own fault
– to get back on track.

RISKS:
There are detrimental effects of both kinds of individual bankruptcy. "The bankruptcy
declaration is the biggest single influence on credit scores," says Experian, one of three major
national credit units. It can also make you look at businesses that request your report,
including other lenders, insurance companies, and possible employers, as a poor risk. Other
Risks of Filling Bankruptcy is the Immovable and property loss. Sometimes the exemption
does not apply to all personal property and property. This means that your bankruptcy
tribunal can confiscate and sell your property to satisfy your creditors.

Comparing your overall debt releases with the bankruptcy filing costs:
Fees for filing (about $300)
Lawyer's fees (1000-5000 dollars)
Improved rates of insurance (auto, homeowners, health, etc.)
negative effect for two years on your credit value

If you are just trying to wipe out credit card debt worth $2,000, bankruptcy is not
worth the money. Bankruptcy may well not be the greatest way to minimize your creditors by
30 to 60% because you provide them the lump sum payment immediately. It helps you
discover a respected lawyer that would like to help you find out about your alternatives.
Herrn argues the fact that it remains on your credit report for 10 years is a great
misperception about costs for bankruptcy.
"Your credit score is the most important thing for lenders these days. Today, like two
decades ago, people are just not criminalized," adds Herr. "In reality, two years after filing, I
have seen many customers receive the approval for a car loan at a good interest rate, and
others can qualify for home loans, even in shorter time following their second bankruptcy."

BENEFITS:
The greatest method to avoid financial obligations is occasionally to file for
bankruptcy. The following are the benefits or the advantages of filing for bankruptcy.
1. An automatic creditors' stay. The court automatically issues this stay for any debt
collection activities once you are filing. It truly does not cancel your debt, but suspends debt
recovery until your case of bankruptcy is complete. It doesn't mean more:

Calls or letters from debt collectors

Lawsuits on the debts
Wage garnishments
Home mortgage foreclosures
Property repossession
 If a creditor attempts, after the court has granted an automatic stay, to collect a debt from
you, your lawyer can disregard court actions. This allows the court to stop, penalize them
and/or require them to pay you for damages.

2. Debt unloadable. You could have the option of discharging or canceling your debt. An
unloadable debt can be erased through insolvency. These include debt on the credit card,
medical, utility and personal loans.

3. Exemptions from bankruptcy may allow you to retain property ownership following
bankruptcy. If a property can be 'exempt,' this means that you mustn't worry about the
bankruptcy seizure. Specified exemptions protect an asset up to some cash amount; the
exemption occasionally covers the whole asset value. Certain sorts of assets such as a motor
car or wedding ring may be exempt, but others may apply to any property that you have.

4. Your employment also includes the protections provided by bankruptcy law. For you
to declare bankruptcy, future employers cannot discriminate against you. So, in your future
professional aspirations, financial mistakes in the past do not affect you.