Bankruptcy for debt is a phenomenon that is happening, and it’s not something that should be taken lightly. People opt to choose bankruptcy because debt can sometimes be too overwhelming, and sometimes this is the only solution they see. However, it’s important to understand just how bankruptcy works in order to fully understand whether or not this is the right choice for you. Bankruptcy for debt, and if it is really an option for you, is something that should be taken into consideration seriously as being bankrupt poses a lot of changes not just to your finances, but to your life as a whole.
According to The Balance, given that bankruptcy is an entirely different endeavor in itself, it’s important to understand that your decision to file bankruptcy must be final as it takes a lot of processes to execute. This means it’s important to ask yourself a few relevant questions on bankruptcy for debt and if it is really an option for your specific situation.
Have You Tried Negotiating?
Sometimes, we fail to consider that if we do find ourselves in too much debt and that we can’t repay everything, we might be able to do something by assessing the debt we have and try to negotiate with the creditors. Negotiations of course can be tricky, and a lot of factors are in play such as your credit score. However, successful negotiations might mean having less to repay, or at least less interest rates.
Have You Tried Consolidation?
If negotiating for better debt plans doesn’t work, perhaps debt consolidation might help you. Instead of renegotiating separately, why not just consolidate all your debt into one single debt that you have to repay? Sometimes people tend to bury themselves in debt because they don’t have the capacity to pay for everything all at once – so perhaps simply paying for one thing consistently might make budgeting much easier.
- In fact, some creditors might be willing to settle your debt instead of simply having it discharged by the time you file for bankruptcy. This means there’s a lot of chance that you might be able to negotiate a settlement in your favor if you’re just a few months late in terms of your payment with your creditor.
- Of course, this doesn’t mean you should purposefully be very late with your payment so you could get a settlement as a mismanaging debt can still get you bankrupt.
Have You Been Disadvantaged By Medical Bills?
This question is important as medical bills are part of the leading causes of a lot of bankruptcy cases as people tend to have a lot to pay for when they don’t have access to adequate health insurance. If you file for bankruptcy, the process might be relieving as this can discharge these bills, or you may be provided with a breather thanks to a renewed repayment plan.
Have You Access to Savings, Assets?
If you don’t have access to savings, if you don’t own assets, or if you do own assets but their worth is less than your debt, then bankruptcy might be a remedy for the situation. This is because assets that aren’t secured with loans can be taken by creditors, and the bankruptcy process might help you not lose these assets.
Have You Tried Counselling?
People on the verge of panicking about their finances might wonder why credit counselling is even an option, but it can be of great help especially if you don’t think you’re capable of being able to bring yourself back financially regardless of the choices you make. Sometimes, the mind plays a lot of tricks, and things such as stress might be hindering you from getting your finances sorted out properly. Being able to find adequate credit counselling might help you find ways to solve your issues in terms of money.
Beyond counselling, it may be of use to consult business professionals in terms of concerns on business and personal bankruptcy as well. You may refer here for such a service, where professionals can share their insights to you depending on your particular predicament.
Bankruptcy for debt is a phenomenon that happens not just to people, but to businesses as well. Bankruptcy is something that is real, and it’s something that everyone should consider in order to formulate a much stable financial plan if they are in a difficult situation. As such, knowing about bankruptcy, and bankruptcy for debt, is a good way to have a heads up on what to do should a similar situation occur for you. After all, bankruptcy can affect your life in a lot of ways, and knowing how to deal with it can save your financial status.
However, should you have any specific concerns on bankruptcy for debt, it’s best to communicate with a financial and legal professional as they have the training and skills necessary to be able to tackle the issue depending on your specific needs. This is especially true if you have particular assets or properties you want to be able to protect, or if you’re married and have children among many other factors.
P.S. Many thanks to Bella Flanagan for providing this valuable material. Bella Flanagan has dedicated much of her life to law, and her pieces as a writer are imbued with her wisdom obtained from over 20 years of experience in business. Bella enjoys hanging out with her grandchildren when she has the free time.