I have often heard both the terms Bankruptcy and Bankruptcy Protection, what is the difference?
Bankruptcy -vs- Bankruptcy Protection
Posted on Wednesday, November 1, 2006
posted by Questions @ 1:46 pm
1 Expert Comment:
At November 1, 2006 |
2:49 pm
, Barton Goth, GCO Inc. Bankruptcy Trustees Said...
When people refer to “Bankruptcy Protection,” they are typically referring to the “Stay of Proceedings” that comes into effect upon filing one of the variety of options available within the Bankruptcy & Insolvency Act (BIA). This Stay of Proceedings is what stops or postpones the ability of ones creditors to make any collection attempt for outstanding debts.
In contrast, when a company files for bankruptcy this is a specific type of action under the BIA that sets out a legislated process that must be completed for an individual or a corporation to deal with the debts in question. One of the components of this process involves an automatic Stay of Proceedings that protects the debtor and permits him the space necessary to complete the requirements of the bankruptcy itself.
Please type your comment below:You must be logged in to post a comment.
