Why does legal system permit individuals-business entities

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Assignment:

Why does the legal system permit individuals and business entities (e.g., corporations, LLCc, etc.) to seek protection under the bankruptcy law? Kath: The legal system allows individuals and businesses to seek protection under bankruptcy law because it gives them a fair way to deal with debt they can't afford to pay. When someone files for bankruptcy, they get a chance to stop all collection efforts and take time to sort out their finances.

This is called an automatic stay (Twomey, Jennings, & Greene, 2017, Chapter 34). Bankruptcy helps people get a fresh start while also making sure creditors are treated fairly. It protects the debtor's basic needs, like their home or retirement savings, and gives them a path to move forward instead of being stuck in financial hardship. Overall, bankruptcy creates a balanced system. It gives people or businesses in financial trouble a way to reset while still making sure creditors have a fair chance to recover what they're owed. Respond to Kath answer.

Reference no: EM133876923

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