What Is Bankruptcy And When Should I Declare It?
If you are excessively in debt so that there is no way of making repayments with
whatever income you have then declaring bankruptcy may be your only option. It should
only be considered as an absolute last resort as there are consequences that come
with it.
Bankruptcy is a means for people, businesses or corporations that have more debts
that they can afford to pay to either work out a plan to repay the money they owe
over a period of time or to eradicate their debts entirely.
Where a plan is made to repay some or all of the money owed over a period of time,
this is referred to as a
Chapter 13 plan.
But if payment can’t be paid over time, an individual or business can file a bankruptcy
under
Chapter 7 plan.
Here the assets are liquidated and most debts are written off.
After a Chapter 13 bankruptcy it is difficult to get credit again. However, after
a Chapter 7 bankruptcy it will be even more difficult to rebuild your credit so
you should consider Chapter 13 first.
To commence proceedings, you need to find out if you are eligible for a Chapter
7 bankruptcy. But if you are not eligible then you may have to explore Chapter 13
bankruptcy.
As bankruptcy is complicated it is important to consult a bankruptcy lawyer before
your file. Again, before you file for a Chapter 13 is finally discharged, you must
receive credit counseling from a non-profit making couneling agency who are register
under the federal bankruptcy reform of 2005.
If you have declared bankruptcy you will be barred from certain professions.