BANKING

Understanding Bankruptcy [Qualifications & How to Apply]

Published

2 years ago

Understanding Bankruptcy [Qualifications & How to Apply]

Bankruptcy is a legal process that allows individuals or businesses to have their debts forgiven or restructured. It can be a difficult and stressful experience, but for some, it may be the only way to get a fresh financial start.

In this article, we will discuss the qualifications for bankruptcy and how to apply for it. It is important to note that bankruptcy should only be considered as a last resort and that there are alternatives to bankruptcy that may be more suitable for your situation. Regardless of which route you choose, it is crucial to understand all of your options and to seek professional financial advice before making any decisions.

What Is Bankruptcy?

Bankruptcy is a legal process that allows an individual or business that is unable to pay their debts to either restructure or eliminate those debts. The goal of bankruptcy is to allow the debtor to either pay off their debts over time or have their debts forgiven, depending on the type of bankruptcy filed.

There are several different types of bankruptcy, including Chapter 7, Chapter 11, and Chapter 13. The type of bankruptcy that an individual or business may be eligible for depends on their financial situation and the specific laws of the jurisdiction in which they reside.

In general, bankruptcy is a way for individuals or businesses to get a fresh start financially and to be relieved of the burden of excessive debt. However, it is important to note that bankruptcy can have significant consequences, including damage to credit scores and the potential loss of certain assets. As a result, it is important to carefully consider all of the options available before deciding to file for bankruptcy.

Types of Bankruptcy

There are several types of bankruptcy that individuals and businesses can file for in the United States. Here is a brief overview of the most common types:

Chapter 7 bankruptcy: This is also known as a “liquidation” bankruptcy. It allows individuals or businesses to have their debts discharged, or eliminated, in exchange for the liquidation of some of their assets.
Chapter 11 bankruptcy: This type of bankruptcy is usually filed by businesses, but individuals can also file for Chapter 11. It allows the debtor to reorganize their debts and come up with a plan to repay their creditors over time.
Chapter 13 bankruptcy: This type of bankruptcy is similar to Chapter 11, but it is only available to individuals. It allows the debtor to repay their debts over a period of three to five years, using their disposable income.
Chapter 12 bankruptcy: This type of bankruptcy is similar to Chapter 13, but it is specifically designed for family farmers and fishermen. It allows them to repay their debts over a period of three to five years, using their disposable income.
Chapter 9 bankruptcy: This type of bankruptcy is specifically designed for municipalities, such as cities, towns, and school districts. It allows the municipality to reorganize its debts and come up with a plan to repay its creditors over time.
Chapter 15 bankruptcy: This type of bankruptcy is used when an individual or business has filed for bankruptcy in another country and seeks recognition and protection in the United States. It allows for the coordination of bankruptcy proceedings in multiple countries and is intended to protect the interests of creditors and other stakeholders.

It’s important to note that bankruptcy is a legal process that can be complex and involves many steps. If you are considering filing for bankruptcy, it is a good idea to seek the advice of a bankruptcy attorney. They can help you understand the process and determine the best course of action for your particular situation.

Who is Eligible to File for Bankruptcy?

Bankruptcy is a legal process that allows individuals, businesses, and other entities to obtain relief from their debts. There are several different types of bankruptcy, including Chapter 7, Chapter 11, and Chapter 13, which are available to different types of debtors.

Individuals: Individual consumers can file for bankruptcy under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. To be eligible to file for Chapter 7 bankruptcy, you must pass a means test, which is designed to determine whether you have the ability to pay your debts. To be eligible to file for Chapter 13 bankruptcy, you must have a regular income and your debts must meet certain limits.
Businesses: Businesses, including sole proprietorships, partnerships, and corporations, can file for bankruptcy under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code. Chapter 7 is typically used by businesses that are no longer viable and are seeking to liquidate their assets in order to pay their creditors. Chapter 11 is typically used by businesses that are seeking to reorganize their debts and restructure their operations in order to continue operating.
Other entities: Other entities, such as municipalities, non-profit organizations, and farmers, may also be eligible to file for bankruptcy under certain circumstances.

It is important to note that bankruptcy is a complex legal process and that the eligibility requirements for each type of bankruptcy can be complex. If you are considering filing for bankruptcy, it is advisable to consult with an experienced bankruptcy attorney to determine which type of bankruptcy is appropriate for your situation and to ensure that you meet all of the eligibility requirements.

Why Declare Bankruptcy?

Bankruptcy can be a difficult decision to make, but it is often a necessary option for people facing overwhelming financial challenges. Some common reasons that people may consider bankruptcy include divorce and the associated legal costs, a large amount of medical debt, poor financial decisions such as excessive credit card use, job loss, and unexpected emergencies like natural disasters or theft.

While bankruptcy is not a bailout, it is a way for people to get a fresh start and regain control of their finances. If your bills have become unmanageable and your income is not enough to cover them, bankruptcy may be a viable option to help you get back on track.

How to File for Bankruptcy

Filing for bankruptcy can be a complex and intimidating process, but it can also be an important financial tool for individuals or businesses that are struggling to pay their debts. Here is a general overview of how to file for bankruptcy:

Determine if bankruptcy is right for you: Before you start the process, it’s important to understand that bankruptcy is not a one-size-fits-all solution. There are different types of bankruptcy, and each has its own eligibility requirements and consequences. It’s a good idea to speak with a bankruptcy attorney or financial advisor to help you determine if bankruptcy is the right option for your situation.
Gather your financial information: You will need to provide detailed information about your assets, debts, income, and expenses when you file for bankruptcy. This may include tax returns, pay stubs, bank statements, and other financial documents.
Choose the type of bankruptcy that is right for you: There are two main types of bankruptcy for individuals: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidating your assets to pay off your debts, while Chapter 13 involves creating a repayment plan to pay off your debts over a period of three to five years.
File a petition with the bankruptcy court: You will need to file a petition with the bankruptcy court in your jurisdiction, along with the required documentation and filing fees.
Attend a meeting of creditors: After you file your petition, you will need to attend a meeting of creditors, also known as a 341 hearing. At this hearing, your creditors will have the opportunity to ask you questions about your financial situation and the bankruptcy process.
Complete any required credit counseling: Depending on the type of bankruptcy you are filing, you may be required to complete credit counseling before your debts can be discharged.
Obtain a discharge of your debts: If your bankruptcy case is successful, the bankruptcy court will issue a discharge of your debts, which means that you will no longer be responsible for paying them.

It’s important to note that the bankruptcy process can vary depending on your jurisdiction and the type of bankruptcy you are filing. It’s a good idea to seek the guidance of a bankruptcy attorney to help you navigate the process and ensure that everything is done properly.

Advantages of Bankruptcy

Here are some of the advantages of bankruptcy:

It can provide relief from overwhelming debt: Bankruptcy can allow you to discharge (eliminate) most or all of your debts, giving you a fresh financial start.
It can stop creditor harassment: When you file for bankruptcy, an automatic stay goes into effect that prohibits creditors from trying to collect on debts. This can provide some much-needed relief from creditor harassment.
It can protect your assets: Depending on the type of bankruptcy you file, certain assets may be protected from seizure by creditors.
It can give you a chance to reorganize your finances: Some types of bankruptcy allow you to reorganize your finances and come up with a plan to repay your debts over time.

Disadvantages of Bankruptcy

Here are some of the disadvantages of filing for bankruptcy:
It can have a negative impact on your credit: Bankruptcy stays on your credit report for up to 10 years, and it can significantly lower your credit score. This can make it difficult to get credit, a mortgage, or other loans in the future.
It may not discharge all types of debt: Some types of debt, such as student loans, child support, and taxes, are generally not dischargeable in bankruptcy.
It can be expensive: There are fees associated with filing for bankruptcy, and you may need to pay for legal representation.
It can be emotionally difficult: Filing for bankruptcy can be a stressful and emotional process, as it may involve facing difficult financial realities and letting go of assets that you have worked hard to acquire.

It’s important to carefully consider the pros and cons of bankruptcy before deciding whether it’s the right option for you. If you’re struggling with debt, it’s a good idea to speak with a financial professional or a bankruptcy attorney to get advice on your options.

Conclusion

bankruptcy is a legal process that allows individuals or businesses to eliminate or repay their debts. There are different types of bankruptcy, including Chapter 7, Chapter 11, and Chapter 13, each of which has specific qualifications and requirements. To determine which type is right for you, seek the advice of a bankruptcy attorney or credit counseling agency. Consider the potential consequences and alternatives, such as debt settlement or credit counseling, before making a decision. It is important to address financial distress as soon as possible.

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African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises (SMMEs) and Boost Trade

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African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises

The African Development Bank Group (www.AfDB.org) and Standard Bank Group (SBG) on Monday signed a landmark financial agreement to enhance funding for small, medium, and micro enterprises (SMMEs) and expand trade across Africa.

The agreement includes a R3.6 billion investment in a social bond and a $200 million Risk Participation Agreement (RPA) for Standard Bank of South Africa Limited (SBSA). This initiative strengthens Standard Bank’s lending capacity, ensuring greater access to finance for SMMEs, a critical driver of economic growth and job creation in South Africa.

African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises

The social bond investment promotes inclusive economic development, particularly for SMMEs with a turnover below R300 million and loan sizes under R40 million. This financing will support up to 4,000 businesses, helping them scale operations, create jobs, and contribute to economic resilience.

Kenny Fihla, Deputy Chief Executive Officer of Standard Bank Group and Chief Executive Officer of SBSA, welcomed the investment, stating: “This landmark partnership strengthens our ability to support SMMEs, the backbone of South Africa’s economy. With approximately 3.2 million SMMEs accounting for 60% of jobs, ensuring access to finance is crucial. This initiative aligns with our Sustainable Finance Framework and our commitment to financial inclusion.”

In addition to the social bond, the $200 million RPA enhances trade finance across Africa, focusing on Low-Income Countries and Transition States. This agreement enables local banks to increase lending by sharing risk, bridging the trade finance gap, and promoting intra-African trade.

African Development Bank and Standard Bank Unite to Support Small, Medium, and Micro Enterprises (SMMEs) and Boost Trade

Leila Mokaddem, Director General for Southern Africa at the African Development Bank, highlighted the broader impact: “This collaboration marks a significant milestone in our long-standing partnership and is a testament to our shared commitment to supporting SMMEs’ growth and enhancing trade finance across Africa. Expanding financial inclusion and trade opportunities empowers businesses to drive economic transformation and regional integration. The Standard Bank Group remains a strategic partner in our shared vision for economic development on the continent.”

This initiative aligns with the African Development Bank’s Ten-Year Strategy (2024–2033), which prioritises industrialisation, regional integration, and improving the quality of life in Africa. It also supports Standard Bank’s Sustainable Finance Framework, reinforcing both institutions’ commitment to fostering green and inclusive growth.

“We are proud of this transaction, demonstrating our shared commitment to sustainable financing. By supporting businesses, we create long-term economic opportunities and financial resilience,” stated Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank.

Kenny Fihla reaffirmed the significance of the collaboration:

“By providing much-needed capital, we are helping enterprises overcome challenges and thrive. This partnership illustrates the power of collaboration in driving meaningful economic and social change in Africa.”

BANKING

The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

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2 weeks ago

Christopher

The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

The International Islamic Trade Finance Corporation (ITFC) (www.ITFC-IDB.org), a member of the Islamic Development Bank (IsDB), has reinforced its position as a key player in the Islamic syndications market, achieving prominent rankings in the 2024 Bloomberg and Refinitiv League tables.

The International Islamic Trade Finance Corporation (ITFC) Maintains Leadership in Global Ranking of Islamic Syndications for 4 Consecutive Years

For the fourth consecutive year, the ITFC top-tier performance reflects a strategic focus on delivering impactful trade finance solutions. For 2024, Refinitiv ranked ITFC as Globally # 1 Bookrunner and Mandated Lead Arranger (MLA) in their Islamic Syndications League table. Additionally, and Bloomberg also ranked ITFC among the top Bookrunners and MLA in the Islamic Syndications League table. These rankings are a testament to the ITFC ability to consistently deliver value-driven results and maintain a strong position among leading international and regional financial institutions.

The recognition from Refinitiv and Bloomberg confirms that ITFC is a key player in facilitating trade among OIC member countries. This not only reaffirms the ITFC status as the pre-eminent provider of trade solutions but also underscores its remarkable ability to draw investments from a wide spectrum of global investors and financial institutions.

Additionally, it emphasizes the positive impact on the lives and livelihood of people inherent in the ITFC business operating model, demonstrating its effectiveness in meeting the unique financial needs of OIC member countries.

The Refinitiv and Bloomberg League tables rank banks and financial institutions based on their performance in loan syndications, bonds, and mergers and acquisitions (M&A) transactions. The rankings, including arrangers, bookrunners, administrative agents, and advisors, are published quarterly and annually.

Distributed by APO Group on behalf of International Islamic Trade Finance Corporation (ITFC).

About the International Trade Finance Corporation (ITFC):
The International Islamic Trade Finance Corporation (ITFC) is a member of the Islamic Development Bank (IsDB) Group. It was established with the primary objective of advancing trade among OIC member countries, which would ultimately contribute to the overarching goal of improving socioeconomic conditions of the people across the world. Commencing operations in January 2008, ITFC has provided more than US$83 billion of financing to OIC member countries, making it the leading provider of trade solutions for these member countries’ needs. With a mission to become a catalyst for trade development for OIC member countries and beyond, the Corporation helps entities in member countries gain better access to trade finance and provides them with the necessary trade-related capacity building tools, which would enable them to successfully compete in the global market.

BANKING

Afreximbank and Kenyan government ink milestone agreements to promote industralisation

Published

2 weeks ago

Christopher

Afreximbank and Kenyan government ink milestone agreements to promote industralisation

Afreximbank will finance the development and operationalisation of industrial parks (IPs) and special economic zones (SEZs) to bolster the country’s industrialisation and export manufacturing

African Export-Import Bank (Afreximbank) (www.Afreximbank.com), Africa’s foremost trade development Bank, today in Mombasa, Kenya, ratified a series of initiatives designed to support Kenya’s industrialisation and export-led development agenda. Under the terms of the initiatives, formalised at a signing ceremony with the Kenyan authorities, Afreximbank will finance the development and operationalisation of industrial parks (IPs) and special economic zones (SEZs) to bolster the country’s industrialisation and export manufacturing.

Afreximbank and Kenyan government ink milestone agreements to promote industralisation

The proposed industrial parks, to be developed by Afreximbank through its affiliate company, Arise Integrated Industrial Platforms (Arise IIP), will create and sustain an environment in which export-oriented industries can thrive, by leveraging economies of scale, shared infrastructure and access to global markets.

Two projects to be undertaken by Afreximbank, with the support of the Government of Kenya and other strategic collaborators, are the development of the Dongo Kundu Integrated Industrial Park and the Naivasha Special Economic Zone II (Naivasha II), for which, having secured leases of the relevant land, Afreximbank intends to leverage the expertise and experience of Arise IIP, a special economic zone developer with experience in the development of integrated industrial parks in Africa.

Both the Dongo Kundu Integrated Industrial Park and the Naivasha Special Economic Zone II are included in the Fourth Medium Term Plan (2023-2027) of the Kenyan government’s Vision 2030, entitled “Bottom-Up Economic Transformation Agenda for Inclusive Growth”, reflecting the high priority which state institutions are giving to measures that strengthen, expand and accelerate Kenya’s capacity to export value-added goods within Africa and globally.

Speaking on the signing, the President of the Republic of Kenya, H.E. Dr. William S. Ruto said; “We have a responsibility to steer the country in the right direction, harnessing the immense potential of manufacturing, industrialization, agro-processing, and value addition within Special Economic Zones. The signing of these agreements today marks a significant milestone in Kenya’s development, expanding opportunities to enhance our manufacturing sector and create a more conducive environment for investment. We convene here today to sign an investment – and not a loan – undertaken by people whose faith in this country and its possibilities motivates their decision. This is our country, let’s continue to do whatever it takes to make it an attractive destination for those who want to invest.”

In his own comments, Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, said:

“Africa has been heralded as a land of opportunity, blessed with resources that power the world. Yet, we have struggled to translate this wealth into lasting prosperity for our people. For decades, we have watched as others reap the rewards of our natural resources, leaving us tethered to a cycle of dependency—exchanging our riches for aid and loans that kept us on the fringes of the global breadbasket.

“Those days are behind us. Today, Kenya takes a bold step to reshape this story in a profound and impactful manner. These Parks are an integral part of the Government’s plan to boost the country’s economic growth under the Vision 2030 development blueprint.

Today’s signatures are more than ink on paper—they are a promise to the people of Kenya, a pledge that the country will rise as a beacon of industrial might and self-reliance.”

Mrs. Oluranti Doherty, Managing Director of Export Development at Afreximbank, and Captain William K. Ruto, Managing Director of the Kenya Ports Authority, signed the Dongo Kundu Special Economic Zone agreement. Dr. Kenneth Chelule, Chief Executive Officer of the Special Economic Zones Authority, and Mrs. Doherty signed the Naivasha Special Economic Zone agreement, with H.E. Dr. William Ruto, President of the Republic of Kenya, and Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, witnessing the signing of both agreements for the State and for the Bank, respectively.

The Dongo Kundu Industrial Park within the Mombasa SEZ is expected, upon completion, to boost the area with a state-of-the-art industrial park that will contribute significantly to economic growth and industrialisation efforts in Mombasa County and in Kenya as a whole.

The Naivasha II Special Economic Zone – Naivasha II project is located at Mai Mahiu and will include a free trade zone, an industrial park, a logistics zone and a public utility area with a supporting road network. The project will occupy an area of approximately 5000 acres.

The Naivasha II project will also derive value from its strategic geographic position as it sits on the gateway to East and Central Africa through the Northern Corridor Transport System, which comprises both a standard gauge railway and a major highway. Moreover, the SEZ will be close to the Naivasha Inland Container Depot, which serves the East African hinterland countries of Burundi, the Democratic Republic of Congo, Kenya, Rwanda, South Sudan and Uganda.

Other dignitaries in attendance included Mrs Oluranti Doherty, Managing Director, Export Development, Afreximbank; Hon. Davis Chirchir E.G.H, Roads and Transport Cabinet Secretary; Hon. Hassan Ali Joho, Cabinet Secretary for Mining, Blue Economy and Maritime Affairs; Hon. Salim Mvurya, Cabinet Secretary for Youth Affairs, Creative Economy and Sports of Kenya and Honourable Lee Kinyanjui, Cabinet Secretary, Ministry of Investment, Trade and Industry. Additionally, Captain William K. Ruto, Managing Director, Kenya Ports Authority; Dr. Kenneth Chelule, Chief Executive Officer, Special Economic Zones Authority; His Excellency Abdulswamad Shariff Nassir, Governor of Mombasa County; the Honourable Benjamin Tayari, Chairman, Kenya Ports Authority, and Mr. Fredrick Muteti, EBS, Chairperson, Special Economic Zones Authority attended the event.

Distributed by APO Group on behalf of Afreximbank.

About Afreximbank:
African Export-Import Bank (Afreximbank) is a Pan-African multilateral financial institution mandated to finance and promote intra-and extra-African trade. For 30 years, the Bank has been deploying innovative structures to deliver financing solutions that support the transformation of the structure of Africa’s trade, accelerating industralisation and intra-regional trade, thereby boosting economic expansion in Africa. A stalwart supporter of the African Continental Free Trade Agreement (AfCFTA), Afreximbank has launched a Pan-African Payment and Settlement System (PAPSS) that was adopted by the African Union (AU) as the payment and settlement platform to underpin the implementation of the AfCFTA. Working with the AfCFTA Secretariat and the AU, the Bank is setting up a US$10 billion Adjustment Fund to support countries effectively participating in the AfCFTA. At the end of December 2023, Afreximbank’s total assets and guarantees stood at over US$37.3 billion, and its shareholder funds amounted to US$6.1 billion. Afreximbank has investment grade ratings assigned by GCR (international scale) (A), Moody’s (Baa1), Japan Credit Rating Agency (JCR) (A-) and Fitch (BBB). Afreximbank has evolved into a group entity comprising the Bank, its impact fund subsidiary called the Fund for Export Development Africa (FEDA), and its insurance management subsidiary, AfrexInsure (together, “the Group”). The Bank is headquartered in Cairo, Egypt.