Insolvent: Effects and legal consequences of bankruptcy

Sometimes, bankruptcy is inevitable. You understand the consequences of filing for bankruptcy and you have decided what is best for your future. In view of this, what do you think about taking the next step and declaring bankruptcy? Many people decide to hire a bankruptcy attorney before formally filing for bankruptcy. In most cases, this is an important step because a lawyer often produces more favorable results than you could achieve for yourself. A lawyer is particularly important if you need to talk with your creditors. Usually, the federal bankruptcy law requires bankruptcy filers to receive advice on consumer credit from an approved entity within 180 days of the bankruptcy petition.

The bankruptcy affects the person in multiple aspects such as:

– In its capacity.
– In the exercise of certain rights.
– In your personal freedom.
– In your individual rights.
– Etc.

The word “bankrupt” to which reference is made, subsequently, is the person on whom the fault fell, of the bankruptcy process.

Disabilities and prohibitions

If the judge declares the bankruptcy as fraudulent or guilty, the bankrupt will be arrested. However, the bankrupt can be exempted from preventive arrest, offering bail and guaranteeing it with real presentation of the bankrupt to the order of justice when it is required.

The bankrupt is left separately and excluded from the day of the declaration of bankruptcy, the administration of all its assets.

Prohibition of practicing commerce

– The bankrupt is prohibited by legal incapacity
– The bankrupt may not enter into a partnership contract (he can not be a member).
– The bankrupt can not be a broker (stock exchange, insurance, real estate, etc.).
– The bankrupt will not be able to be a customs agent.
– The bankrupt can’t change residence.

All communications will be reviewed and intervened as decreed to establish a relationship or links with the actions of the bankrupt in the declaration of bankruptcy.

Effects in front of the partners

The bankruptcy of the collective societies will bring with it that of the collective partners, although the respective liquidations of the patrimony of the society and the patrimony of the partners must always be kept separate.
The bankruptcy of limited partnerships

In this case, the bankruptcy of the company does not entail that of these partners, who are obliged to respond only up to the limit of their contributions.

Effects against creditors

The declaration of bankruptcy in front of the creditors produces the effects derived from the principle of “Equality of treatment”, that is they lose the free exercise of their individual actions, and they are grouped in a mass (mass of creditors or passive mass), different from the mass of bankruptcy. However, a bankrupt person can borrow money from a third party that does not require strict requirements like what is required by the bank. They can count on other types of soft loans such as Loans for Bad Credit. Regardless of their credit history status, they can still borrow money in emergency situations.