Bankruptcy laws have been introduced to provide some relief to debtors. Generally, people fall in debt trap knowingly or unknowingly, but it does not mean that they have no right to live freely. If debtors are unable to repay the amount of debts towards creditors, then they can file bankruptcy. Financial experts consider bankruptcy as a last option to eliminate the debts completely. There are many other options available in UK market too like debt management, IVA, debt consolidation loans etc. According to a common law, bankruptcy involves the liquidation of assets. It means when an individual becomes bankrupt then court sells the property of debtor to recover the amount of creditors. It does not mean that all assets will be sold out. Few assets or properties can be exempted from the liquidation depending upon the type of bankruptcy you filed.
There are many bankruptcy laws exist in UK market. Debtors are free to choose any type as per the requirement, debt amount and kind of debt. There are few important chapters in it like bankruptcy chapter 7, chapter 11 and chapter 13. Bankruptcy chapter 7 contains the liquidation of assets. Chapter 11 is available only for companies, organization, partnership firm, industries etc. Under chapter 13, courts allow debtor to repay the debts with low interest rate. It is advisable to hire a best bankruptcy attorney, lawyer or experts. These people are professionals and can help you in worse situation as well. Individual should file bankruptcy petition with the help of attorney because they know what to write and how to write in document.
Bankruptcy petition is document through which you file bankruptcy and let the court know that you are unable to repay the existing debts. According to bankruptcy laws, after filling bankruptcy, creditors are not allowed to contact you for repayments. Court issues notice to all creditors and ask them not to contact debtor unless the case is over. Now days, bankruptcy courts concentrate on creditors as well and try to provide them some relief from loss.