Liquidating personal debt
In finance and economics, liquidation is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations as and when they come due. Bankruptcy Code governs liquidation proceedings; solvent companies can also file for Chapter 7, but this is uncommon.The company’s operations are brought to an end, and its assets are divvied up among creditors and shareholders, according to the priority of their claims. Not all bankruptcies involve liquidation; Chapter 11, for example, involves rehabilitating the bankrupt entity and restructuring its debts.
However, before a creditor can legitimately serve a bankruptcy petition upon a debtor, he must first serve a statutory demand upon the debtor for the outstanding debt.Categories: Debt, Debt, bankruptcy and liquidation This guide provides an overview of the options available to both individuals and companies who find the they are unable to meet their debt obligations.Topics covered include bankruptcy, alternatives to bankruptcy, arrangements that can be made with debtors, liquidation, alternatives to liquidation, examinership and receivership.Liquidation is the process of bringing a business to an end and distributing its assets to claimants.Once the process is complete, the business is dissolved.It can take account of personal relationships of mutual trust and confidence in small parties, particularly, for example, where there is a breach of an understanding that all of the members may participate in the business, Upon hearing the application, the court may either dismiss the petition, or make the order for winding-up.
The court may dismiss the application if the petitioner unreasonably refrains from an alternative course of action.
If the company goes into liquidation or the person enters a personal insolvency procedure, e.g.
bankruptcy, the guarantor will have to repay the creditor.
Trading companies are usually closed down, although sometimes they may continue to trade for a short time so the business can be sold.
When the liquidation is complete, the company is removed from the Companies Office Register.
If there is a surplus after all the company assets have been dealt with and the debts and liquidation expenses have been paid, then it will be distributed back to the shareholders.