Filing for Bankruptcy, some Basics

Filing for Bankruptcy, some Basics

By Claire Gray
On 17 Feb, 2015

    When discussing bankruptcy is can be a terrifying recommendation. The word bankruptcy alone sounds very gloomy. It is all over the media on the horrors of seemingly stable large businesses going bankrupt. There is a wide range spectrum between personal and corporate bankruptcy. You may even wonder if an individual or a corporation was doing so well how did they go bankrupt? You may be in fear of being close to going bankrupt. After all, we are living in an economy where our mailboxes are crowded with credit card offers. But when is the right time to declare bankruptcy? How are you able to know the correct time?

    In order to determine if it is the right time for you to throw in the towel and declare bankruptcy below are a few questions to ask yourself to see if you are in the danger zone:

    • Are you only making the minimum payments on your credit cards?
    • Are you being called by bill collectors?
    • Are you using your credit cards to pay for essentials?
    • Does the thought of organizing your finances frighten you or make you feel as if you are not in control?
    • Have you looked into debt consolidation?
    • Are you unclear on how much you owe?

    Determine your Situation

    If when reading these questions you answered yes to two or more, you may want to consider giving your financial circumstances some more attention. In simple terms, bankruptcy means that you owe more money that you can manage to pay.

    In order to figure out where you stand financially, make an inventory of all of your liquid assets. It is important to include stocks, bonds, vehicles, real estate, college savings, non-bank account funds, and retirement funds. Calculate an assessment for each item.

    Once you have calculated an estimate for each item, add up your bills and the credit card statements. If the debt that you owe is larger than the value of your assets, declaring bankruptcy may be a way out of a tricky financial situation. However, bankruptcy is not something that should be approached in a casual manner. After all, filing for bankruptcy is not a simple process and is not an easy fix for debt that is out of control.

    How do I Declare Bankruptcy?

    There are two ways in which you can go bankrupt. The more familiar course is to willingly file for bankruptcy. The other way which you can go bankrupt is for creditors to order the individual bankrupt.

    There are a various amount of ways in filing bankruptcy, each of these ways have their pros and cons. It is important prior to filing for bankruptcy to contact a lawyer in order to determine the best fit for your circumstances.