Tuesday, April 23, 2013

When To File For Bankruptcy - Seven Tips

Bankruptcy is a last resort for many people. Debt is sometimes quite difficult to get out of, and no amount of saving or investment is going to help you in this regard. If you are thinking of filing for bankruptcy, however, it is important to take a few things into consideration. 

Bankruptcy is essentially a legal status that you will take when you are unable to pay debts to your creditors. A lot of the time, bankruptcy is usually going to be imposed on an individual via a court order. Some people may see that it is best for themselves to take bankruptcy on their own in order to avoid having to pay off the large debts that they have acquired.


Creditors' Legal Rights


Bankruptcy does not mean that you can completely avoid your debts. It means that you can only make them wait for you to pay back your debts over time. Essentially, this is a way of buying you time.


Your Co-Signer


The co-signer to any loans that you have taken out is still going to be held responsible for anything that you cannot pay back. This is something that bankruptcy is not going to cover, so remember this.


Debt Collection


If you can go for bankruptcy, then you will be able to stop debt collection harassment. This is often one of the many reasons why many people will seriously consider taking this particular path.


Types


There are different types of bankruptcy that you can choose. If you want to find out more about them, then you are going to have to speak with your lawyer. He or she will be able to run you through the details so that you can make an informed choice when it comes to your financial decisions.


Discrimination


According to the law, you cannot be discriminated against by employers or other institutions just because you are bankrupt. This means that you will have legal protection and be able to get other work.


Cost


There are going to be costs involved when it comes to declaring yourself bankrupt. Each case is going to have a different cost attached to it, though most of the time these are going to be the same. The fees usually fall between $150 and $200.


Your Credit Rating


Your filing for bankruptcy is something that is going to remain on your credit rating for at least ten years. This is why it is important to take everything into account when you decide to file for bankruptcy. If you are looking to buy a property within the next ten years, then this is going to end up being very difficult no matter how much money you have.

Make sure to keep all of these points in mind before you decide to take that step. This will ensure that you can make a proper, informed decision.

Author Bio:
Ashley is a professional writer. She is interested in writing finance, Money saving related articles.This is one such article which explains on how You can Avoid bankruptcy with Debt Management Counseling & Learn to control your finances by Credit card debt management programs.


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