You owe your various creditors small amounts of debt, but for some reason, you’ve overlooked paying them back. Then, once you finally decide to repay each of those debts, you suddenly realize that the entire balance of your savings account isn’t enough to settle them in full. You then entertained the idea of filing for bankruptcy, but as you may have little to no idea about the basics of doing so, here are some considerations that you need to know should you decide to pursue it:
Bankruptcy isn’t a one size fits all option as you have several types to choose from, though there are three that are most commonly used by both individuals and businesses.
Filing for bankruptcy doesn’t mean that you don’t have to pay anything at all. In fact, you should start separating a certain portion of your money to pay for the filing fee that the court where you submitted your bankruptcy claim would charge you instead of blowing your entire savings account into debt repayments alone.
A common misconception surrounding bankruptcy is that it’s meant to wipe one’s financial slate clean. That couldn’t be farther from the truth as it can’t relieve a non-dischargeable debt like your income tax liability, for instance.
If it’s your first time to file for bankruptcy, you can take comfort in the fact that more than 700,000 to one million individuals and businesses have done it from 2013 to 2017. However, it doesn’t mean that you should simply jump into filing for bankruptcy without fully informing yourself about its basics. The above-listed considerations when filing for bankruptcy as well as consulting an experienced lawyer to help you further with it should make it easier for you to accomplish. After all, you can’t let your debts get the best of you.