Bankruptcy a term which you must aware in this financial market

Bankruptcy is a term which is applicable to person as well as business house. In simple explanation bankruptcy is the condition when the person or the business organization will be unable to pay the debt over his head. There will be huge amount of debt pertaining to the person or the business house, where they are financially not ready to pay the debt and ultimately they will be declared as bankrupt. The chapter 7 and the chapter 13 explain the bankruptcy in more detail. 

Yes, increase of the bankruptcy there are certain advantages and here we are going to disuses the advantages of the bankruptcy in detail. Once a person or a business organization declares as bankruptcy they will be stopped to foreclosure their homes in order to process for the payments. Similarity they will not be forced for the wage garnishment and harassment by debt collectors as a result of which they will be able to make the arrangement for the payment of the debt. There also raises a question that whether you can file for the bankruptcy. And the answer to this question is clearly explained under the chapter 7 and the chapter 13.  

Chapter 7 of bankruptcy: the chapter 7 of the bankruptcy is the initial steps of the bankruptcy towards the writes off the debt. Once a person or a business house is declared bankruptcy under the chapter 7 immediately a trustee will be appointed by the honorable court. The basic and the sole function of the trustee is to take care of the property which is to be sold or to auctioned in property. Accordingly the trustee acts and makes the necessary arrangement to sold the property. Once the property is sold with the highest possible value from the bidder the money will be collected and it will be posed by the trustee. The next step is to write off the whole debt with the collected money. At the same time it has to be kept in mind that during the whole process of selling the property the debtor will have no privilege to access the property and if it is a business houses the debtor will be prohibited to perform the business operation with the property held with the trustee for the purpose of selling. If the money collected by selling the property is not enough to repay the debt, the whole money will be distributed in the respective ratio to repay the debt. 

Chapter 13 of bankruptcy: The chapter 13 of bankruptcy is absolutely opposite to the chapter 7. The chapter 13 of bankruptcy is applicable to person who have regular source of income. In case of the chapter 7 the property will be sold to repay the debt by the trustee. In case of the chapter 13 the debt will be paid from the regular source of income. A proportion of the income will be used to repay the debt for the bankruptcy person.