Disadvantages Of Bankruptcy

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These are the five types of Bankruptcy that an individual or an organization can file for in the United States of America, which all fall under the U.S Bankruptcy Code. They all protect the organization and the individuals against creditors that are willing to retrieve their debts by any means. They also give the time and the opportunity to the debtors to reorganize themselves and their assets so that they can pay back their debts. It also gives the opportunity to organizations to stay in business and continue working while following the bankruptcy process. However, one downside of filing for bankruptcy is how expensive it is, especially for individuals who can end up spending all their income on it. The second downside is how complex filing for bankruptcy is. In the United Arab of Emirates, a new bankruptcy law has just been issued under the federal decree number 9 for 2016. The law provides several ways for organizations to avoid bankruptcy which can lead to the liquidation of assets. The bankruptcy law now focuses more on restructuring, protective composition, and insolvency which will allow organizations to have a bigger chance work with creditors to construct a payment plan that will help the debtor pay their debts through installments within the time designated. This law is completely…show more content…
Investors asked for the reformation of the law because their companies ran into financial problems, and they were unable to reconstruct and stay in business. The law applies to companies that are created under the commercial company laws, companies that are owned by the government, and companies that are developed in the free zones of the UAE. This means that the new bankruptcy law does not apply on DIFC registered companies or the Abu Dhabi Global Market. The law is already published in the official gazette of the United Arab Emirates and is already being
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