Filing for Bankruptcy? Here's What to Keep in Mind

Many people go through financial trouble at certain points in their lives.

11:30 23 December 2020

Some people manage to get out of those financial issues, whereas others may struggle for long periods without ever fixing the problem. Eventually, sometimes the only way out of financial turmoil is filing for bankruptcy and following its procedure legally and safely. Although the idea can be startling for some, it can be the only means to dissolve your debts without facing any legal consequences. This will keep you a chance to start over on a clean slate. However, you should know that some terms and conditions determine whether you’re qualified to make this decision. With that being said, you need to only consider this option if it’s your last resort and if your debts are only piling up to no avail. If you are planning to declare bankruptcy, here are some things that you should keep in mind. 

 

How Can Bankruptcy Help You?

 

People often resort to bankruptcy as a final option when they are in so much debt that they cannot find any alternative. It is an effective solution to financial issues that have gotten too deep with no other way out. The reason bankruptcy is considered a last resort is because it will affect your credit for a long time, even after you are out of debt and have fixed your financial problems. You will be affected when applying for loans, dealing with banks, or other credit entities for a long period as a price for being bankrupt. However, declaring bankruptcy can be a lifesaver in many ways for those who are struggling with debt and have no other option. 

 

Stop Creditor Harassment

 

When you are in debt, you will likely get harassed by creditors often to pay back the money you owe. As seen on https://tlbrownlaw.com/practices/bankruptcy-attorney/, the nagging through phone calls, letters, and even personal visits by creditors can be incredibly overwhelming for those who cannot repay their debt. Although it is perfectly legal for creditors to keep on nagging those who owe them money, it will all stop once you declare bankruptcy. As soon as you file the official legal paperwork or get your lawyer to start the process on your behalf, all creditors are legally bound to stop harassing you and requesting their money back as you will be undergoing different procedures to pay back your credit. They don’t have to receive their money immediately to be legally required to stop contacting you about your debts. The moment you declare bankruptcy and file the paperwork needed before you make this announcement, you no longer need to worry about emails and reminders from your creditors.

 

Press Pause on Evictions

 

Sometimes, people get into too much debt, and they start to get threatened with evictions and foreclosures on their property. All eviction and foreclosure threats will immediately be halted by commencing your bankruptcy procedures until you come up with a payment plan or any alternative option. Bankruptcy gives you some leeway to keep your property without the threat of being left on the streets or losing all your invested money in a split second simply because you were in too much debt. 

 

Reorganize Debts

 

The whole point behind filing for bankruptcy is to solve your debt problems. So when you declare yourself or your business bankrupt, you will get the chance to reorganize your standing debt that works with your realistic financial situation. There may be negotiations with your creditors or even a court order that demands you pay your debt by liquidating your assets. 

 

Steps to Take when Declaring Bankruptcy

 

Declaring yourself bankrupt is an efficient way to get out of debt with minimal damages. However, it is not a process that you can work on in a day or two by yourself without any preparations. As soon as you decide that you need to file for bankruptcy, there are several steps to be taken. 

 

Step 1- Hire a Lawyer

 

The first step to take when you decide to declare bankruptcy is to hire an experienced lawyer to handle the case for you. Declaring bankruptcy is not something you can easily get in and out of debt to solve your financial problems. It is a complicated legal matter that you may not always be able to resolve yourself. Experienced attorneys will advise you on what to do and what not to do, and they file for bankruptcy on your behalf. 

 

Step 2- Prepare For Public Scrutiny

As soon as you file for bankruptcy, your whole financial history will be available for public scrutiny. This is something that must be prepared for, especially if you are a public figure or if you are declaring bankruptcy for your business. You would need to get all your documents in order and consult with your lawyer on the right procedures, so you do not suffer even more damages. It may take you a while to recover financially after declaring bankruptcy, but when you do, make sure your public image as an individual or business does not get harmed in the scrutiny phase. 

 

Step 3- Choose the Right Timing

 

Once you decide that there is no other way out of your financial problems except filing for bankruptcy, you will need to find the right timing to make your declaration and trigger the process. You cannot just suddenly file for bankruptcy without analyzing the appropriate time, especially if you are a business. The process can take a lot of time and effort to prepare, so you will need to choose the right date as once you start the process, there is no going back. 

 

Going through financial trouble can be incredibly overwhelming. Whether your business has hit a financial brick wall or you find yourself stuck in a ton of personal debt, sometimes the only way out of your financial turmoil is filing for bankruptcy. If you decide to declare yourself or your business bankrupt, make sure you choose the suitable timing for your declaration so you can prepare all your documents and be ready for public scrutiny. Remember to hire an experienced lawyer to be by your side every step of the way for the process to run smoothly without any legal trouble.