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Last Updated: Jul 2nd, 2008 - 21:15:22 |
If you cannot repay your debts and realize your in way over your head without a way to repay them in the future there may be a solution for you. Bankruptcy is a financial practice that legally lets you give official notice that you can't pay off your debt now or later.
To declare bankruptcy is a giant step. Some people may be able to dig their way out of the financial hole they are in by consolidating their debts, or making arrangements with their lenders. If you cannot do this bankruptcy may be the only solution for you.
You should begin to find out what the steps that need to be taken are, so you can make this work for you. You may want to talk to a lawyer or a financial professional who may be able to help. Bankruptcy is not an easy decision to make so look at all your options before you decide to go through with it.
The very first thing you should do is find out all you can about bankruptcy. There are several options for business, but do you know there are two for individuals? Chapter 7 is one, and Chapter 13 is the other. Find out what the differences of these two are so you can decide which is the best for you. You must learn what your obligations are for each one to make sure you make the best choice for you.
While you are learning about bankruptcy you may still want to consider other options. You may be able to use debt consolidation, which takes all your debt and puts it into one monthly payment.
If the problem with your finances is that you barely make your payments each month or your credit card debt is over and above what you can afford to pay debt consolidation may be the answer your looking for.
You can also see if a budget will help get you through this difficult financial time. If you live simply and pay off your bills with money you would usually use for entertainment or new clothes, you may be able to do it this way.
Have you tried to negotiate new terms with your lenders? Your lenders don't want to see anyone file bankruptcy, if you sit and explain (bring proof) to them what the situation is, they may be able to help you.
You will need to research what the eligibility requirements for filing bankruptcy are, If your debt to income ration is high you may want to look at chapter 13 bankruptcy. In some instances you may not be eligible to declare bankruptcy at all.
You must take into consideration what you own and what your debts are. You will have to consider what will happen to your home, your car, even your retirement plan. Each state has criteria of its own to see if people can file for bankruptcy. Some states allow consumers who claim bankruptcy to keep the family home, other states do not.
Make a list of every debt you have. Then make one of everyone of your assets. Find out what your state allows to be wiped out, because not all debt may be relieved. Child support payments cannot be wiped out by claiming bankruptcy.
When you have gathered all your information, and decided which chapter of bankruptcy is good for you, perhaps you even have consulted with a lawyer or financial professional to make sure you have all the fact straight, then you can begin the bankruptcy declaration process.
It is always best to be completely honest in this situation. You can file the bankruptcy claim by yourself, but it is advisable to work with a lawyer or financial pro since they have the knowledge and experience of working with the legal system on cases like yours.
Declaring Bankruptcy is a very big step and you want to get all the facts about what will happen during, and after. Know how this will effect future credit, and home ownership. After learning all you can, getting all your facts straight, and consulting with a professional, you may see options you did not know you had, or you may determine that bankruptcy is for you.
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