Bankruptcy Law to Regulate Bankruptcy Filing CaseA person is considered bankrupt when he is unable to repay the debt owed by a creditor. But to be legally bankrupt, the person should meet the legal aspects arranged by the law to be stated in the bankrupt condition. Most of the bankruptcy filing taken to the bankruptcy court is initiated by the debtor, while the involuntary bankruptcy petition can be taken to the court against a debtor who is engaged in a business. The modern bankruptcy law tends to pay more attention to restructure debts and remodel the organization for rehabilitation and continuation of the business. This approach can provide second chances to the debtor to run the business and repay the debts to the creditor.
The law is also intended to protect both of the debtor and creditor. There are chances of fraud during the legal process of bankruptcy trial. The concealment of documents and assets can harm the creditor. Undisclosed assets during a bankruptcy trial is considered as falsification or fraud, it is a constitute perjury based on the United States Federal Law. The rights of the creditor have to be fulfilled by the debtor who has the obligation to repay all of their debts. The bankruptcy fraud is considered as federal crime in the United States of America.
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