Why Nakumatt may have filed for bankruptcy
In #UgandaNewsBriefing group, a forum member has asked why the news says Nakumatt has filed for bankruptcy when last week we read that the company was in talks with Tuskys for a merger.
A company or an individual files for bankruptcy for various reasons with the following being the most common.
1) To get court protection from debtors. For as long as one is considered BANKRUPT, no one you owe money to can demand you to pay them. So bankruptcy gives you sleep.
2) To consolidate or evaluate (in peace) the next move. Either ditch assets or if lucky get an angel investor to inject cash.
3) To get time to find potential buyers or partners to merge with.
4) While bankruptcy gets the pressure off, it does not mean you retain your assets and sell them for your benefit. The assets on loans will usually revert to the bank or lender. Any assets not on loans will be sold and the money used to pay creditors..albeit not what you fully owe but at least a bit.
5) Bankruptcy for an individual can come in handy. You walk away from all your debts. In Canada, specificall the Province of New Brunswick, you get to keep your house and your car. The bank cannot reposess your house or car. Unless you miss several mortgage payments. Same goes for the car.
Most times the bankruptcy comes after job loss for one reason or another, loss of income, a divorce, some other crises that causes one to incur consumer debt. In this case all consumer debt vanishes.
NOTE: You pay into a pool with your trustee a set amount monthly for 9 to 21 months till you are discharged.
BELOW ARE SOME PEOPLE WHO HAVE FILED FOR BANKRUPTCY:
Feels good to belong. But do remember that each had their own circumstances.
Martha Leah Nangalama