Five Things You Must Know Before Declaring Bankruptcy
Are you a business owner and is your company hurting post-Covid-19 or due to the increased inflation? Is the debt that’s bothering you? Yes, one way to save your sinking ship is by declaring bankruptcy.
However, it isn’t as simple as it seems. Bankruptcy must be the last option for you. You must try everything before turning to bankruptcy. So, if you’ve already looked into all your options and declaring bankruptcy seems to be the only way out, you must know the following things first before taking any steps further:
When you’re already in a tight position, more loans are hard to come by. Anyone who’s drowning in debt won’t be able to secure any more loans no matter how hard it gets. It is something you must understand before filing for bankruptcy.
However, it won’t take a lot of time for you to get back on track. With a few months of hard work, you’ll be able to raise your credit score again. When done, you can apply for a secured credit card and get back into the game.
Filing for federal bankruptcy isn’t free of cost. Yes, every state has different laws for bankruptcy and the same goes for charges. There’s going to be a little administrative fee for declaring bankruptcy that you cannot avoid.
Nevertheless, if you’re unable to pay the fee for bankruptcy, you can make installments for it and pay it in parts at your convenience. Besides that, you may also have to pay your attorney or financial counselor who takes care of the bankruptcy process.
Loss of Assets
Declaring bankruptcy and having property and other assets isn’t possible. When filing for bankruptcy, you may have to get rid of some of your assets, even if not all of them. Again, every state has different laws for bankruptcy.
Some of them require you to hand over all your property while others may only take the bigger items and leave the rest. It’s good to check with your attorney for all such details before you officially file a bankruptcy petition.
The fourth thing and one of the major concerns for most people is the take it takes. Yes, it can be cumbersome to file for bankruptcy as you won’t be able to take a new start right after filing for bankruptcy.
It may take you a few months to a year or two to get back to your feet. Until then, you can sit tight and wait for the nightmare to be over. It’s going to be a nightmare because your hands and feet would be tied financially.
Last but not least, there’d be no repossessions or debt collections. It is one of the best things about bankruptcy. Your creditor won’t be able to ask you for any debt payments and file any lawsuits.
The clerk responsible for handling your bankruptcy case will inform all your creditors about it and it is something that will cut out their legs. Hence, you’ll be free of all your financial liabilities, though it may not take away all of your pending taxes.
And that’s all, friends! Bankruptcy undeniably has its upsides as it brings along debt relief. However, it’s always good to weigh the pros and cons of everything before making a decision. Good luck!