Bankruptcy, how did it happen?

Subject: Bankruptcy, how did it happen? Wed Aug 19, 2009 9:39 pm

Recently just a few days ago, one of my employer's client (from what i heard) was sued for bankruptcy or being unable to pay up the debts and had to fold up his business. I was wondering, if the third party didnt sue him for bankruptcy, maybe the business could recover and pay back the debts. Now that the third party sued him and made him a bankrupt, he wont get the full payback anymore. So why sue in the first place? It doesnt make sense to me. Some enlightment? confused

Subject: Re: Bankruptcy, how did it happen? Wed Aug 19, 2009 11:47 pm

Well, in desperate desire to recover as much debt as possible. To sue someone for bankrupt will enable you to seize the assets and sell to recover the debts. Many times, company take for granted that people will have the same thinking, thus causing more debts to be incurred and the worst it goes. When there are more debtors claiming, your chances of recovering become lower as you will have to share the assets. So the earlier, the better. Before it becomes worst.

Well you might be right that the business may recover, but likely chance of worst is higher actually...

Subject: Re: Bankruptcy, how did it happen? Thu Aug 20, 2009 1:48 am

Subject: Re: Bankruptcy, how did it happen? Thu Aug 20, 2009 8:25 pm

Not that we should get out of debt. Most business have debts even when the company is rich. Theory is: "money in my pocket is better than with someone else". But remember to pay your debts to avoid loss of trust. Therefore is always a balance between keeping your promise to supplier and keeping money in your own account. Lastly avoid bad debts. Keep chasing for money that you rightfully deserve...

Rising Star Posts: 161 Reputation: 2 Join date: 2009-06-28

I seen a few bankruptcy cases before..
Actually it is not uncommon in Singapore..

And some of the business owners actually wanted to be declared as a bankrupt in some cases..
Sometimes it might work for you to your own advantage..

Subject: Re: Bankruptcy, how did it happen? Mon Aug 31, 2009 6:05 pm

Does the person declared bankrupt have to pay anymore money back if he gets another business up and running? Or can the debts all be forgotten? How does making oneself declared bankrupt help with the debts?

Subject: Re: Bankruptcy, how did it happen? Mon Aug 31, 2009 8:37 pm

Well, when a person is declared bankrupt does not mean that he will stop paying. As far as possible, your income will still be liable to be used to pay back the liability. Till the court and the creditors are satisfied with your effort, you will not be released from bankruptcy. If you are not release from bankruptcy, there are many limitation that you have to live with... Like cannot own house, investment, going overseas (unless pre-approved), and even opening another company etc. This may take 5 years or more.

Subject: Re: Bankruptcy, how did it happen? Wed Sep 02, 2009 12:57 pm

That sounds really bad.

Is there such thing as "bankruptcy insurance"? Wink

I have met a bankrupt turned millionaire. So I know it's possible to get out of that hole, and even thrive.
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Subject: Re: Bankruptcy, how did it happen? Wed Sep 02, 2009 10:25 pm

Yes, many of them pay back faithfully and got out of bankruptcy. As they are once an entrepreneur, many of them has resources of people who are willing to partner them as they are experience and daring. Thus they can make a come back much faster if they gain support.

Subject: Re: Bankruptcy, how did it happen? Thu Sep 03, 2009 7:57 pm

I don't think there is "bankruptcy insurance" since the insurance companies will more likely make losses than profits. Also, a search on google seems to reflect that too.

Is it possible to tell if a company is going to face bankruptcy? Are there tell tale signs? Or does it just go poof in a matter of seconds? Does delayed payment signify one of the tell tale signs or is it just a bad habit a lot of businesses have?

Subject: Re: Bankruptcy, how did it happen? Thu Sep 03, 2009 9:35 pm

Yes, there is no such thing as bankruptcy insurance that I know of too.

There are some tell tale signs:
1. Sudden delay in payment,
2. You purchase business profile from acra. If they are having some legal issues with major banks, the records will show pending legal issue.
3. It is good to know people in the company, the staff will tell you their salary payment is late for the month as they are more concern over their salary than your payment.