The content is accurate at the time of publication and is subject to change.
Bankruptcy could be an inevitable thing if we don`t start changing our spending habits. Spending more than what you earn is the main reason why businesses or individuals go bankrupt.
Bankruptcy is a legal way for business owners and individuals who are unable to repay their creditors. Since it is legal and legitimate, a lot of people having unpaid obligation issues opt to this. It is a way of resolving financial issues but it is important that you understand how it really works.
Filing or declaration of bankruptcy can only be done once in six years. You may want to save this very effective option until you feel that it is the only and best way for you to resolve your financial issues. Yu too should now that there is no need for you to file bankruptcy just because you are being threatened by your creditor`s.
Filing bankruptcy might either do good or bad in the situation so if you are not too sure on what to do and when is the right time to do it, talk it out with an expert. There are lawyers who specialize on this matter. Bankruptcy laws differ from the place and the situation so different laws may also apply.
Here is the summary of what bankruptcy can do for you:
- it could stop all harassment form debt collectors
- it cold prevent the foreclosure of a property like your house and gives you leeway to catch up on delayed payments
- It could discharge you from most of your debts
- It can prevent the termination of some services due to unpaid dues and
- It could stop wage garnishments.
While these are the things you can be free of, here are the summary of the things that can`t be resolved with bankruptcy:
- it can`t eliminate the obligations from a co-signed loan
- it can`t discharge the debts incurred after bankruptcy filing
- it can`t be used to discharge child support and alimony, some student loans and criminal penalties.
In most cases, the individual or party who declared bankruptcy needs to appear to the court to come up with an agreement with their creditors. Your creditors are present during the meeting but worry not for any abusive word from them for it is never allowed. It often takes four months to half a year for the case to be completed after the day of filing.
It is easy to prevent bankruptcy; all it takes is learn the proper way of managing every cent in your pocket.