An Essential Guide To Bankruptcy: What Is It All About

October 26, 2011 by  Filed under: Bankruptcy 

Bankruptcy almost seems like the big black hole of financial debt. But do we really know what it means? What does filing bankruptcy even entail? If you are looking for answers, then here is your source to all you need to know to help clear up some of the questions that you may have about the big bad “B” word.

What Exactly Is Bankruptcy?

Bankruptcy is a basic legal process that provides a person with immediate financial relief. Bankruptcy comes along in someone’s life when they can no longer afford to pay for their bills. Past due debts are now going into collections and you have somehow gotten in way over your head. Bankruptcy can help by actually stopping legal actions by any and all creditors. This can more often than not release an individual from any and all outstanding debts and allows them to get back on their feet so to speak.

Different Bankruptcy Law

There are many different loopholes and versions of this and that when it comes to bankruptcy law. There are a few standard one that you should be aware of though. The process of bankruptcy according to the bankruptcy law requires you to first file an assignment of bankruptcy. Notify all present creditors that you are now starting to file bankruptcy. You will need to settle on some of your assets, meaning you may have to cash in on some of the things that you own to get out of debt. You must file tax returns, and then you are required to attend at least two credit counseling sessions. After that you are put through the discharge process and you now have officially filed for bankruptcy. These laws change all of the time so it may be wise to speak to a legal professional when handling such important financial matters.

Do You Need To File Bankruptcy?

Bankruptcy is definitely not a decision to be taken lightly. Take some time out and talk to a financial advisor before you decide anything. You can even look at your finances on your own and see if there is anything that you can figure out to do before declaring bankruptcy. This is not a quick fix. It will take not only a financial toll on you but an emotional and physical one too.

Declaring bankruptcy typically stays on your credit report for about seven or eight years. This will make it somewhat hard to make big purchases such as a house or a car. It may even make it difficult to obtain any types of credit card no matter how small. Since you have essentially defaulted on all of your debt, credit card companies and other loan companies will look at you as a high risk borrower. If you really feel like there is no other way for you to get back on your feet then go through with your bankruptcy plans, just tread lightly.

Nowhere Else to Turn

Obviously it is not an ideal situation to be going through bankruptcy proceedings. If you are however in serious financial ruin, bankruptcy may be the only choice you have to consider. Not just to get rid of old debts but to allow you to breathe easy again and not have to worry about a creditor on the phone every time it rings.

Learn more tips and advice when taking the financial step of declaring personal bankruptcy by visiting our website as well as knowing where to go to for further bankruptcy information.

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