Why We Have Bankruptcy?
There are a lot of misconceptions about bankruptcy in our society. Perceptions on the process range from viewing it as the ultimate get out of jail free card, to viewing it as a last ditch effort leaving a person homeless and without recourse. The truth is bankruptcy has been established to prevent society from reaching either extreme. Without bankruptcy the open credit economy would not be able to rely on the belief that they will be repaid, and the increased risk could seriously hinder or stop lending all together. On the other hand, without a bankruptcy option borrowers would be increasingly hassled by creditors eventually ending in the first creditor to file suit getting all possible assets and leaving the borrower destitute.
The Bankruptcy Compromise
Through bankruptcy the court tries to reach a compromise that works for all the interested parties. Without a bankruptcy proceeding creditors are in competition to try and get whatever assets a person has, so the first creditor to sue gets everything and all the rest get nothing. By going through bankruptcy the court treats the creditors as one whole, trying to get everyone a fair share of what’s available. Not only does bankruptcy make for a more efficient administrative process but it can also help the borrower by allowing some assets to be retained allowing them to get back on their feet.
Utah Bankruptcy Attorney
The reality of bankruptcy is that it is the best outcome to a bad situation. Obviously, it would be great if everyone could pay off their debts and no one had financial troubles but that is just not the case. If you find yourself in a tough spot financially then bankruptcy might be the best route for you. Salcido Law Firm offers free consultations to help you understand bankruptcy and how it could benefit you. Call or email us today to set up an appointment.