Question

2. The issue of both corporate and personal bankruptcy filing is a very difficult decision with social and personal implications that have been widely discussed. Do you think this is a legal aspect that should be maintained or eliminated? Support your answer with academic arguments and bibliographic references from peer-reviewed articles.

Answer 1

The process of bankruptcy and its alternatives are evaluated to give a sound judgment that this process should be followed or not. The process of bankruptcy is sometimes considered the best alternative to exit from a debt crisis but there are other than taking this legal route. There are options that can get out of a debt crisis without going through the complications of filing for bankruptcy. The option of forbearance allows the person or a corporation to stop paying his loans for a particular period if unable to make payments.The loan modification can be done by the lender where the interest rates can decrease for the remaining period of the loan. The other option is to go for arbitrage settlements rather than filling for legal proceedings. These can be considered to avoid the process of bankruptcy which is complicated and disallows the person or corporation to borrow loan for a period of 8-10 years and should not be maintained to allow simper proceedings between a lender and a borrower.

Article used - When to Declare Bankruptcy (Investopedia)

Sorry we cannot provide links as per our guidelines, but you can find this article easyily