Financial distress is a situation in which a company or an individual is not in a position to pay pending debts.
It is at this moment in life that an individual or business should think of a way of getting out of the situation.
Bankruptcy could be the only option to a debtor when other solutions have failed.
Before one has made up their mind, that this is what they really want, they should look for a lawyer with whom they can work with.
They should submit to them a copy of their assets, a list of all the creditors and also recent financial statements.
Bankruptcy auction is a plan in which the property of the debtor is sold in public under the supervision of court officials.
This might be a good or a bad thing depending on where the case has reached.
In case the individual has not yet reached at the point of selling the assets in public, it would not be advisable for the debtors to go this way.
Under the new rule of financial distress, the debtor may not have a chance to choose what to keep and therefore, the most treasured of the debtors assets may end up being sold.
This is mainly so under the liquidation chapter.
Another disadvantage of going the bankruptcy auction way is that part of the property may end up being sold at a lesser value than it was bought for.
This might not be in the best interest to the debtor who at times would be having sentimental attachments to a certain piece of asset.
Insolvency auction is a fair deal on the part of the buyer who will be in a position to buy assets at a lower price.
These assets could then be resold at a much better deal.