Question

1) Is it ever strategic to file for bankruptcy? 2) When and under what circumstances? 3) Research to find a company that has used bankruptcy as a part of its business strategy.

Answer 1

a) The decision to file for bankruptcy is not one which should be taken easily for any person or company.Before continuing, it's crucial to learn about the alternatives on the table, and what to anticipate once you start the filing phase.There are different types of bankruptcy one is liquidation form of bankruptcy,other is that form in which creates a payment schedule for investors to be paid back over a period of time .Also, filing for bankruptcy is not cheap ,biggest cost is that of hiring a lawyer.The cost will rise quickly.Often, there are certain long-term, non-monetary risks you may not know about while making the decision to register.Whether you register in person or provide specific assurances from company investors, your credit record will eventually attract the highest amount of all. Bankruptcy has the lowest potential effect on your credit report. Filing for bankruptcy is right in some cases .Debts are not dischargeable until you apply for bankruptcy some of them are student loans,taxes,real estate liens.So, it is not that strategical to file for bankruptcy.

b)Bankruptcy is not necessarily evil or healthy, but it is an essential protection for responsible borrowers who find themselves in tremendous debt problems. A tiny number of filers seek to exploit the insolvency mechanism in order to cover properties and deceive creditors.It depends on situation.Both persons and companies, based on their specific situation, may apply for bankruptcy protection. Records of specific profits and properties must be reviewed to decide whether they are liable for bankruptcy filing. The qualifying criteria differ based on the form of bankruptcy defense you are seeking.

c)General Motors used bankruptcy as a business strategy.