Is Bankruptcy Right for You? Staying afloat in today’s difficult and competitive financial world can be extremely challenging. Often times we run into obstacles that are simply insurmountable and cause us to fall flat on our financial faces. When faced with a situation like this, you may need to consider taking drastic measures to fix the problem. Bankruptcy is one of these drastic measures available to you in times of financial hardship. Many people wonder when they should consider filing for bankruptcy or if they even qualify. This article is aimed at helping you make an intelligent and informed decision.
Life’s Tough Obstacles First, let’s discuss the problems in life that can lead one to file for bankruptcy. The causes are numerous, but there are some that are more common than others. You may be faced with a long period of unemployment which has crippled you financially. You may be going through costly medical procedures or even struggling with marital problems. For some people, debt levels just get out of hand. Ask yourself if you feel afraid of sorting out your finances. Are you afraid of finding out just how much you are in debt? Are you stuck making minimum payments on credit cards or even missing payments? Do you often use your credit card to purchase necessities? If you answered yes to these questions, you may want to consider bankruptcy.
Determine your Asset and Debt Levels Total up all of your assets. This is basically everything that you have that is worth something. It includes your bank account amounts, retirement funds, stocks, bonds, real estate investments and vehicle values. Then, compare that number to the amount of debt you owe. If the debt you owe is more than the amount of assets, you may want to consider filing bankruptcy. This may be your only way out of a problematic financial problem.
Educate Yourself There are different types of bankruptcy that you can file. Chapter 7 bankruptcy is different than chapter 13 bankruptcy. If you choose to file a chapter 7, your assets will be liquidated and distributed to the various creditors that you owe. A chapter 13 bankruptcy is, more or less, a grace period. It gives you a certain period of time to repay your debts. Go online and research which type will better suit your individual situation. Remember that this is a scary and difficult time for anybody but sometimes these sorts of things are necessary.
How to Declare Bankruptcy You cannot just shout out, “I declare bankruptcy!� You have to either fill out the proper paperwork or wait for your creditors to get fed up and ask a judge to mandate bankruptcy upon you. There are pros and cons to each route so do your research! The most common way is to file for bankruptcy, but your situation may necessitate the alternative. Speak with financial experts and lawyers as they know the ins and outs of these situations. In the end, you just have to have courage that everything will get better.