The word “bankrupt” come from the Italian words, “banca rotta”, which means “broken bench”. In Italy, money dealers worked from benches or tables. If a dealer ran out of money, his bench was broken in half and he was out of business.
Put simply, bankruptcy is an organized way of dealing with a person or business’s debts. What happens if there is no bankruptcy or orderly way to liquidate a debtor’s debts and assets? Easy, pure chaos. Without bankruptcy, creditors “in the know” about debtor’s debt problems would swoop in and assert control over debtor’s assets leaving little if anything to other creditors. Without orderly processes, debtor’s lives are in a free fall where creditors seize debtor’s assets and income in a never-ending downward spiral.
This is why bankruptcy is necessary. Bankruptcy laws are designed to level the playing field amongst creditors and debtors alike and create a semblance of order out of chaos. In bankruptcy, debtors have enormous power to assert a court order for creditors (the vast majority of creditors anyway) to back off debtor and his family. The filing of a bankruptcy petition with the bankruptcy court invokes an immediate court order to cease most collection activity against debtor.
A “trustee” is appointed to administer the debtor’s estate. In a Chapter 7 Bankruptcy, if debtor has no non-exempt assets or other payments/transfers to avoid and recoup money for the estate, trustee files a no-asset report and the bankruptcy case is closed with no money distributed to any creditors.
If you take away one word out of the word bankruptcy, take this word away from this lesson: order. Filing a bankruptcy can bring order back into your life when there is chaos. Businesses protect businesses with the bankruptcy tool all the time. So you can protect your family by using the bankruptcy tool available to you as well.
CALL NOW FOR A FREE STRATEGY SESSION FROM A MN BANKRUPTCY LAWYER AT LIFEBACK LAW FIRM
When the time is right, or when you are ready to get your life back, reach out to Minnesota’s most kind and helpful bankruptcy law firm by going now to www.lifebacklaw.com. You will be so thankful you did.
