Nobody wants to declare themselves bankrupt, but it does happen. Mostly, it isn’t actually your fault. Instead, you’re just the victim of some unfortunate circumstances. Perhaps somebody stole from you or maybe your business went under and you just lost control of your finances. It’s just one of those things.
In this post, we take a look at some of the things that you probably never knew about bankruptcy. Check them out below.
It Costs Money
Filing for bankruptcy isn’t free. In fact, in some places, you’ll need to pay various fees for legal proceedings. In most cases, your attorney will be able to tell you your costs.
You Can Self-File
You don’t necessarily have to get professional assistance when filing for bankruptcy. In many places, you can do it by yourself.
However, taking this approach is not recommended. While it might seem cheaper, it often leaves you at risk of having to make further settlements after the declaration of bankruptcy comes through.
You’ll Have To Divulge All Your Income And Assets
The courts will want to know whether you really can’t pay your bills or not. For that reason, they’ll ask you for a full list of your assets and liabilities. They can then compare what you owe to your capacity to pay. Generally speaking, it is better to pay off your debts if you can to keep your credit score high.
It’ll Affect Your Ability To Borrow
The effect of bankruptcy on your credit report can be quite extreme. Some lenders will refuse to lend to you at all, while others will only agree to small amounts at high rates of interest.
Generally speaking, you want to avoid going into any form of debt in the years following bankruptcy. It should be a time when you build your finances and improve your net balance position. Then, after several years, you should be in a better position to move forward with things like car loans and mortgages.
It’s A Great Way To Start A New Life
Money worries can bring you down over time. They cause so much stress that they can affect your enjoyment of everyday life. You can’t feel exuberant with your family or friends because you fear what might be going on in your bank account.
Bankruptcy, though, is a great way to forge a new beginning. Once you clear the debt, it’s gone forever. You’re then free to make new plans and leave your financial concerns in the dust. They can’t hurt you any more.
There Are Different Types Of Bankruptcy
The type of bankruptcy that you use will depend considerably on your circumstances.
Most people opt for either Chapter 7 or Chapter 13.
Cities and other public bodies sometimes file for Chapter 9 while businesses can file for Chapter 11. Chapter 12, sometimes used by members of the public, is for farmers.
In summary, bankruptcy isn’t as scary as many people think. Ultimately, it’s a legal process that gives you a fresh financial start.
I would like to file for bankruptcy because I can no longer pay for my debts. Thank you for sharing here as well the importance of seeking recommendations from friends and family. I’ll also keep in mind to compare fees. www.omdlaw.com/chapter-7-bankruptcy