When you are in a bad financial position no matter the reason then there comes a point when it is not possible to move forward any longer. This is when you need to consider applying for personal bankruptcy protection.
Personal Bankruptcy has some positive and some negative ramifications and it should only be used in the most dire of situations. It is important that you know what will happen if you do decide to take this option and how it may affect your future life. We will answer some of the common questions related to personal bankruptcy, and why it might, or might not be right for you.
Where to start
A good place to start is online. Finding websites where you can chat to other people that are struggling with the same problems that you are can be a great help. You are not alone.
There are many thousands of people going through the same thing that you are. Talk to them and find out what is working or not working for them, and consider it with your own situation.
Do not wait
If you have looked at all the options and have no viable way to meet your debts then there is no point in delaying the inevitable. It is best to file as soon as you are certain this is your only option so that you can have everything sorted out as quickly as possible. It will freeze your financial position and may allow you to retain items that could be repossessed if you wait.
Be honest
It is vitally important that you are totally honest about all of your assets and liabilities. Hiding assets or lying about your resources could stop you from being given bankruptcy protection or even charged with an offense. An honest and open attitude will make the process faster and let you start to get back on your feet financially.
Exclusions
There are some liabilities, which bankruptcy does not cover. This may include recent credit card purchases and use of credit cards to pay taxes. Tax debts, student loans, child support and alimony debts are generally not covered. It is important to understand that these debts will continue after you have become bankrupt so that if they are the reason you are seeking bankruptcy protection it will not help you.
Be informed
It is important that you fully understand the process of bankruptcy and the best way to do this is to understand the laws in your area. When your lawyer suggests a course of action, make sure you understand why he is suggesting it and what it means to you and the bankruptcy proceedings. There are different types of bankruptcy that may be available to you so it is important to understand what the likely outcome is before entering bankruptcy.
Avoid bankruptcy
With this information, you can now consider your financial position. Perhaps you can avoid bankruptcy by knowing that it cannot fix all of your problems. You many want to try and meet with your debtors and arrange a mutually beneficial plan that gives you certainty and allows them to recover a substantial part of their debt.