The prospect of declaring bankruptcy is frightening. Not feeling like you are in complete control over your finances can make you feel like a failure. When you are in a situation in which you are contemplating the pros and cons of bankruptcy it is important to note that you are in complete control. Bankruptcy allows individuals to regain control over their finances. It gives you the ability to start over from scratch. There is no need to live in debilitating debt any longer.
Bankruptcy can be the solution if you can answer yes to 2 or more of the following questions:
- Are you only making minimum payments on your credit card?
- Do bill collectors call you regularly?
- When you are paying bills or sorting through your finances, do you feel anxious?
- Are you paying for necessities with credit cards?
- Have you considered debt consolidation?
- Do you have any idea to how much you owe?
Accessing Your Financial Situation
Answering yes to two or more of these questions is a sure sign you should give your financial status a bit more thought. Bankruptcy is a situation where relief is offered when you owe more than you can afford to pay.
It is important first to review your liquid assets. This includes checking and savings accounts, retirement funds, stocks, bonds, real estate, college savings accounts, and other bank and non-bank assets. A rough estimate will do.
The next step is to create a list of your debts including all credit cards, car payments, monthly bills, house payments, and such. Declaring bankruptcy is an option out of a tricky financial situation when your assets are less than your debt.
Steps in Declaring Bankruptcy
There are two ways in which an individual can declare bankruptcy. The most common method is to voluntary file. The second is for creditors to ask the court to order an individual bankrupt. For the best outcome and restart to your financial future consulting with a bankruptcy lawyer is important. An attorney specializing in bankruptcy can determine the best option for your individual circumstances.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy is the most common option for individuals when filing bankruptcy. Some of the most common reasons that individuals are forced into bankruptcy include unemployment, medical expenses, overextended credit, and divorce. Chapter 7 bankruptcy is a straightforward option to settle debts. In this type of bankruptcy any assets you may have that are considered above and beyond necessary will be liquidated. The cash from these assets will be liquidated and distributed to your creditors.
Four months later a discharge will be received. The bankruptcy will stay on your financial record for the next ten years. This doesn’t have to mean your financial life is over. Even with a bankruptcy on your record you can begin to rebuild your credit. Chapter 7 offers a fresh start to individuals quicker than other bankruptcy options such as Chapter 13.
If you are experiencing financial hardship take time to schedule a free consultation with Bohikian Law Group.
Bohikian Law Group specializes in bankruptcy services including chapter 7 and 13 bankruptcy. More information can be found at https://bohikianlaw.com.