Facing Bankruptcy Essay Sample free essay sample

Bankruptcy might hold a different definition based on the people who are will specifying it. when investors heard this universe they have different reaction some are afraid and dying while for others it can intend chance and a concern meeting. Some investors are looking for a concern who are in the span of bankruptcy so they will hold the opportunity to take over the concern but on the portion of the proprietor who are in the brink of bankruptcy it can intend the terminal of the universe. because it might be the lone thing he has and needs to give it up. Based on Wikipedia Bankruptcy is a lawfully declared inability or damage of ability of an person or organisation to pay its creditors. Creditors may register a bankruptcy request against a concern or corporate debitor ( â€Å"involuntary bankruptcy† ) in an attempt to reimburse a part of what they are owed or originate a restructuring. In the bulk of instances. nevertheless. bankruptcy is initiated by the debitor ( a â€Å"voluntary bankruptcy† that is filed by the insolvent person or organisation ) . An nonvoluntary bankruptcy request may non be filed against an single consumer debitor who is non engaged in concern. Many concerns now a twenty-four hours experience bankruptcy. Bankruptcy was originally planned as a redress for creditors non for the debitors. During the clip of King Henry VIII. a jurisprudence was made to let creditor to prehend all the staying assets of a bargainer who could non pay their debt. And the debitor will non lose his freedom he will be charge and topic for imprisonment. In early nineteenth century in England. debitors were frequently released from prison with their debts discharged. However. for many old ages. bankruptcy continued to be a redress prefering creditors. involuntary in nature and mostly penal in character. It was by and large used merely against bargainers. Bankruptcy offers an person or concern a opportunity to get down fresh by forgiving debts that merely can’t be paid while offering creditors a opportunity to obtain some step of refund based on what assets are available. In theory. the ability to register for bankruptcy can profit an overall economic system by giving individuals and concerns another opportunity and supplying creditors with a step of debt refund. Still retrieve the Lehman Brothers Holding Inc. a planetary fiscal service house that did concern banking. equity and fixed income gross revenues. research and trading. investing direction. private equity and private banking. Its bankruptcy filing is the largest US history. affecting debt amounting to $ 613 billion and assets deserving $ 639 billion. So far. the Philippines during that clip have non felt the consequence of the fiscal mayhem in the US in any major manner. The Philippine banking system has minimum exposure to structured fiscal merchandises: intelligence histories of Philippine banks’ exposure to the Lehman Brothers’ prostration put it at about 0. 11 per centum of entire banking assets. or PhP5. 5 billion. Individual Bankss with market losingss from the derived functions securities have already allocated increased loss commissariats in their capital. But the United States is a big economic system with major effects on the planetary economic system. so the Philippines will finally besides feel the pinch. There are several ways through which this is traveling to take topographic point. Some of the Bankss here in our state who had invested on the Lehman Brothers are Banco de Oro and Metropolitan Bank of Trust and Company. If I may spy some other corporation in the United States who filed bankruptcy in 2008 were Washington Mutual Inc. . a savings bank keeping company and former proprietor of Washington Mutual Bank. so largest nest eggs and loan association in the US. The IndyMacBancorp. Inc. . Keeping company of IndyMac Bank. the largest nest eggs and loan association in the Los Angeles country and seventh largest mortgage conceiver in the US during its clip. Theoretical Model When we heard the wordBankruptcy it connotes a batch of things. misdirection. deficiency of financess. or it can besides intend weak leading and hapless determination devising or economic crisis can besides impact any company. But what does it truly intend. Well I have gathered some elements that might be helpful for us to understand the nature of the subject given. The first component to be discussed is the investor’s. this could be one of the factors that can do bankruptcy. and investors can do or interrupt any company they are in. if the investor refused to put money in his bing concern who is the brink of bankruptcy certainly in no clip the said concern will slowly face bankruptcy. Corporate bankruptcies non merely do fiscal losingss for concern spouses. such as clients. loaners and providers. but besides have inauspicious effects on stockholders and securities markets’ investors. Bankruptcy allows a corporation to halt reimbursing loaners and utilize the company’s staying assets. such as hard currency. machines and equipment’s. to reorganise. Reorganization means the house gets a â€Å"fresh start† without the heavy load of debt. Bankruptcy does non ensue in the arrest of all debts because debitors remain in control of corporate operations as â€Å"debtors in ownership. † Stock equity consists of ownership rights that a house sells to investors on a securities exchange or in private minutess. Equity merchandises may include common ( regular ) portions. preferable portions. equity hereafters and equity-linked fiscal derived functions. An investor who buys portions of equity. or stockholder. receives periodic dividend payments and makes net incomes when the company’s portion monetary values lift on the fiscal market. He besides can vote on corporate determinations. appoint senior executives and take part in a company’s one-year shareholders’ meeting. A company that files for bankruptcy by and large has worthless portions of equity. Investors on securities exchanges normally sell such portions. and this procedure causes portions to diminish significantly. However. a firm’s portions of equity may go on to be traded during a reorganisation procedure. provided that the company meets minimal listing demands that a securities exchange. such as the New York Stock Exchange ( NYSE ) or the Johannesburg Stock Exchange ( JSE ) . by and large requires. Alternatively. these portions may be traded in nonprescription ( OTC ) . or electronic. markets. Restructuring procedure has important effects on shareholders’ equity. Besides the fiscal losingss that investors incur. a corporate insolvency instance has an inauspicious â€Å"domino effect† ( concatenation reaction ) on other concern spouses. or merchandise counter-parties. A company that is unable to reimburse loans or run into other pecuniary committednesss when they are due causes other concern spouses to endure losingss. which may take to farther bank ruptcies. Conceptual Model Statement of the ProblemThis research survey aims to find how investors and business communities can get by up if non wholly avoid bankruptcy in the concern industry.Specifically. this research will try to reply the undermentioned jobs: 1. How does bankruptcy impact the following facet?1. 1People1. 2Environment1. 3Business1. 4Government2. How can investor’s avoid bankruptcy?3. Based on the findings what disciplinary step a company who is sing bankruptcy can make? Significance of the StudyThe research worker believed that this survey has a good to the undermentioned: Investor – the consequence of this survey will function as a footing to reexamine and reassess the actions and determination done by the investors. Community – this survey will enable them to be cognizant that they have a function to play sing the bankruptcy of one company. To the hereafter Researcher – the findings of this survey will function as a mention in the behavior of other surveies rel ated to this sort of research. The Researcher – this survey will supply penetrations and construct on what the possible plans can be prioritized in response to the findings of this survey. Scope and Limitation of the Study The Study focuses on how the bankruptcy in the Philippines can happen an alternate solution that can assist the Investors to avoid the issue if non wholly extinguish it. Although there are cases wherein sample instances and state of affairs found abroad are mentioned. they merely serve as comparing of what could hold been and what is really transpirating in this state. Definition of Footings Business – is a lawfully recognized organisation designed to supply goods. services. or both to consumers or third concern in exchange for money Creditors – is a party ( e. g. individual. organisation. company. or authorities ) that has a claim to the services of a 2nd party. It is a individual or establishment to whom money is owed. The first party. in general. has provided some belongings or service to the 2nd party under the premise ( normally enforced by contract ) that the 2nd party will return an tantamount belongings or service. The 2nd party is often called a debitor or borrower. Debtors – is an entity that owes a debt to person else. The entity may be an single. a house. a authorities. a company or other legal individual. Government –is the bureau through which a political unit exercises its authorization. controls and administers public policy. and directs and controls the actions of its members or topics. Industry – refers to the producti on of an economic good ( either stuff or a service ) within an economic system. Investors – is any party that makes an investing. Chapter TwoLocal LiteratureBased on the article published in workingpinoy dated last February 15. 2009. harmonizing to the article during that clip four more pre-need companies are approaching bankruptcy. harmonizing to Philip Piccio. president of the Parents-Enabling Parents Coalition ( PEP ) . a group of parents contending for their open-ended programs with Pacific Plans. Piccio named Pryce Plans as one of the four. but didn’t name the three other pre-need houses in problem. The SEC Chairwoman Fe Barin so told congresswomans that SEC issued 2009 licences to merely 24 of more than 50 pre-need companies. The proposed transportation of pre-need ordinance from the SEC to the Insurance Commission has been approved by the members of the House Committee on Banks and Financial Intermediaries. The transportation is included in a pre-need bill of exchange by Aurora Representative Juan Edgardo Angara. And so Jose Miguel Vasquez president of the Philippine Federation of Pre need Plan co mpanies denied they invested in companies wide which subsequently became belly-up because Philippine jurisprudence prohibits them. Parents Enabling Parents ( PEP ) Coalition. an organisation of proprietors of Pacific Plans open-ended programs. said that none of the pre-need houses under rehabilitation such CAP and Pacific Plans has been punished for misdirection. PFPPCI President Vasquez will inquire the SEC and the Central Bank to let the pre-need industry to put up to 10 % of their entire investings in dollar-denominated securities. Presently. the pre-need industry is allowed to put merely in peso-denominated securities. A list of 19 pre-need houses willing to increase their capital during that clip to get by with troubles in the fiscal markets is included in Salve Duplito’s article on Inquirer. net Money Smarts. One of them is Danvil Plans. In the instance of AMA Plans. it’s new in the 2009 pre-need dealer’s list. so it’s safe to presume its capital is equal. It is besides interesting to observe that Pacific Plans and Ideal Pension Plans are non licensed to sell in 2009. but they are included in this list of pre-need houses willing to increase their capital. The article said that Philam Plans didn’t subscribe the 19-firm understanding because its trust fund is more than equal to pay its program holders. Foreign Literature Harmonizing to Frances Stanford Bankruptcies have become platitude in the last few old ages with the economic recession that has swept the universe. More and more people are out of work and have no other pick than to declare bankruptcy because they are unable to run into their fiscal duties. While life insurance policies are non touched by bankruptcy in that you still have a policy in topographic point to take attention of funeral disbursals and to go forth some money to your household. declaring bankruptcy does hold a damaging consequence on your premiums. Once you declare bankruptcy. this point goes on your recognition record and corsets at that place for 11 old ages. When you apply for life insurance. the company does look into your recognition evaluation to see how good you manage your fundss. Having such a negative point on your study will intend that your premiums will be higher. Take a expression at the monthly or one-year premiums that you are now paying for your life insuran ce. Even if you are able to go on paying this sum after you declare bankruptcy. you have to let for additions in the premium. If you don’t have life insurance. it is best to register for bankruptcy foremost and so use so that you will cognize what your premiums will be instead than hold to cover with increased rates. The best advice for buying life insurance premiums when you are in debt and either cognize that you will hold to finally register for bankruptcy or have already filed is to take out a 10-year policy. In this manner you know that the premiums will stay the same for that period of clip. At the terminal of this period when it comes clip to regenerate the policy and you are still in good wellness. there is a good possibility that your premiums will travel down every bit long as your recognition evaluation has improved. After your bankruptcy claims has been discharged and you are in a better fiscal state of affairs. you should look for quotation marks from several term life insurance companies. There are many such companies that do understand that people are holding fiscal troubles through no mistake of their ain. These companies will make their best to acquire you the best possible rates so that you have the life insurance that you need at an low-cost premium. Although you may be tempted to wait until the bankruptcy has been deleted from your recognition study before using for life insurance. this is non a wise fiscal determination to do. Life insurance is indispensable for everyone in all walks of life. You neer know when you will necessitate it. Local Surveies New surveies are invariably being published that discuss the latest in bankruptcy tendencies and intelligence. If you’re believing about registering bankruptcy. be an informed consumer and utilize these bankruptcy surveies to assist estimate the economic pulsation of your state. The Philippines adopted the International Financial Reporting Standard in 2005. The Filipino Financial Reporting Standards/Philippine Accounting Standards ( FRPS/PAS ) are the new set of Generally Accepted Accounting Principles ( GAAP ) issued by the Accounting Standards Council of the Philippine Institute of Certified Public Accountants ( PICPA ) . which was succeeded subsequently on by the Financial Reporting Standards Council ( FRSC ) . Adoption of the FPRS/PAS became effectual with the one-year fiscal coverage period get downing 1 January 2005. The Civil Codeis the primary jurisprudence regulating insolvency in the Philippines. Particular Torahs can regulate insolvency every bit long as they are no n inconsistent with the codification. These particular Torahs include the Insolvency Law and Presidential Decree 902-A. The Insolvency Law covers suspension of payments along with voluntary and nonvoluntary insolvencies. Presidential Decree No. 902-A gives the Securities and Exchange Commission ( SEC ) legal power over requests for the suspension of payments. A survey made by Insolvency Asia on the insolvency government in the Philippines is provided through the nexus below. The World Bank’s Doing Business Survey assesses informations on concern closings. Consequences for the Philippines can be found through the nexus below. The Asia-Pacific Restructuring and Insolvency Guide 2006. which is linked below. supply an account of the restructuring and insolvency model of the Philippines. Among other subjects. the study covers the legal model and effectivity of tribunal procedures and legal redresss. effects on the direction of the company. functions of cardinal participants involved in the restructuring and insolvency procedure. and fiscal issues such as the order in which creditors are paid in a corporate bankruptcy or settlement. Foreign Studies Privacy is considered by many American to be a cardinal right. Overtime. the legal model protecting single privateness has evolved to react to alterations in the manner sensitive personal information is obtained. retained. and used. Personal fiscal records. which can include list of purchases. bank history Numberss. and other alone identifiers. incorporate some of the most sensitive information about persons. if used unscrupulously. this information can do significant injury. In a universe of paper records and unaffiliated fiscal establishment. which characterized the U. S. fiscal system for most of its history. fiscal privateness concerns were comparatively minor. Information on persons was hard to obtain. was non widely shared among establishments. and was non by and large used as an plus for selling or other intents. Today. nevertheless. three major developments are raising new concerns about protections of personal fiscal information. First fiscal information now flows much more quickly. and in much greater volumes. than of all time earlier. An ordinary desktop computing machine is now significantly more powerful than the mainframe of 30 old ages ago. and can hive away. manipulate. and analyze far more information at immensely lower cost. Progresss in telecommunication allow this information to be sent anyplace in the universe outright. at likewise low cost. These technological developments have created chances for sharing of information among establishment that were barely envisioned even a few old ages ago. In add-on. the coming of big databases available through the cyberspace creates new chances for entree by the general populace to information about persons. frequently without the subject’s cognition or consent. The free flow of information that is now possible offers much advantage in economic efficiency and single wellbeing. At the same clip. it poses possible new menaces to a debtor’s private ness. A 2nd cardinal alteration is the turning integrating and consolidation among fiscal services suppliers. Interstate banking and ramification have allowed Bankss to turn larger than of all time before. and the remotion of regulative restraints has allowed fiscal services organisations to come in lines of concern that were antecedently off bounds. Banks. for illustration. may now consort with houses runing from travel bureaus to wellness insurance suppliers. This integrating will let houses and consumers to profit from â€Å"economies of graduated table. † in which the proviso of related fiscal services together can break run into consumers’ demands at a lower cost. But theseeconomies stem. in portion. from an ability to portion consumer informations across attached entities and that sharing besides raises legitimate privateness concerns. A 3rd alteration is the increasing usage of electronic agencies of buying and payment. Americans increasing usage of recognition cards. debit cards and more late electronic measure payment in stead of hard currency now allows fiscal services companies to roll up tremendous sums of elaborate information about an individual’s dealing. Until late. neither establishment nor persons were able to make elaborate lifestyle portrayals utilizing such information. The creative activity of electronic instance files and the electronic aggregation and airing of bankruptcy information are their earliest phases. Date on the existent injury ensuing from these developments are comparatively scarce. nevertheless. these developments could make a hazard for possible abuse or obnoxious re-use. As the remark submitted on behalf of 20 province lawyer General noted. â€Å"the ready handiness of such information. peculiarly when it may be easy obtained and copied from electronic filings that can be accessed from the cyberspace. greatly increases the concern about the utilizations to which the information might be out. the ability to obtain big sums of information at low cost make the usage of bankruptcy informations for commercial intents economically executable in ways that were non possible when the informations had to be hand-gathered in individual from single clerk’s offices. The effect of each of these developments can be better targeting of fiscal merchandises to single consumers. which can take down monetary values and better service. However. these tendencies besides may increase the hazard of illegal. discriminatory. or invasive usage of extremely sensitive personal information. Included among the concerns raised by the State Attorneys General and privateness advocators are: Identity Theft. More widespread handiness of information such as Social Security Numberss. recognition card Numberss. and other personal identifiers create greater chances for unscrupulous persons commit individuality larceny. Predatory Lending. Greater sharing of information within and among fiscal establishments could take to an addition in the usage of such information unscrupulous loaners. For illustration. sellers engaged in marauding loaning may utilize this information to aim particularly vulnerable debitors. although restricting entree to detailed personal information in bankruptcy filings will non by itself eliminate predatory loaning patterns. it is one measure that can be taken to turn to this jobs Synthesis Chapter ThreeResearch DesignThe descriptive – normative method of researched was used in this survey. The Descriptive attack which aims chiefly at garnering cognition ( i. e. descriptions and accounts ) about the object of survey but does non wish to modify the object. The mark is to happen out how things are. or how they have been. The research worker undertook uttermost attention in the assemblage of informations in order that she could come out with a complete and dependable input in this survey. Normative attack attempts to specify how things should be. which means that it will be necessary to specify besides the subjective point of position that shall be used. This attack has sometimes been called â€Å"applied research. † In carry oning a normative attack. the research worker focused more attending in the aggregation of informations gathered so that all informations will decently classified and categorized harmonizing to their relevancy and part inputs to the anal ysis and reading of informations gathered. Population A ; Sampling Technique The research worker usednonprobability samplingcannot depend upon the principle of chance theory. At least with a probabilistic sample. the research worker knows the odds or chance that could hold represented the population good. The research worker is able to gauge assurance intervals for the statistic. With nonprobability samples. the research worker may or may non stand for the population good. and it will frequently be difficult for her to cognize how good we’ve done so. In general. research workers prefer probabilistic or random trying methods over no probabilistic 1s. and see them to be more accurate and strict. However. in applied societal research there may be fortunes where it is non executable. practical or theoretically reasonable to make random trying. Here. we consider a broad scope of no probabilistic options. Research Instrument The Instrument of measuring in this survey is thru documental analysis of stuffs gathered through books. diaries. unpublished research and surveies. Data Gathering ProceduresThe documental reappraisal and analysis was conducted foremost since it enables the assemblage of preliminary information about the topic of this survey. Interview was besides conducted utilizing the pre-arranged and in agreement day of the months every bit good as locale for interview. Statistical Treatment of Datas Since the survey was descriptive and analytical in nature. the descriptive statistics was used to analyse the informations peculiarly ; frequence distribution and per centum distribution. Frequency Distribution – the sum-up or bite of the frequence of response in a peculiar inquiry point. for one and of the full block of inquiry in another. Percentage Technique – the per centum ratio of a given scope of classs in relation to overall summing up of the constituents of the scope. This technique was used in the demographic profile of the respondents.