Bankruptcy Basics: What Are Considerations When Filing a Bankruptcy?

Bankruptcy Basics: What Are Considerations When Filing a Bankruptcy?

Bankruptcy Basics: What Are Considerations When Filing a Bankruptcy?

Comments Off on Bankruptcy Basics: What Are Considerations When Filing a Bankruptcy?

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:

  1. Depending on whether you’re filing for bankruptcy as an individual or as a business owner, you have three of its most common types to consider

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.

  • If you’re filing for bankruptcy as an individual, you can opt for either Chapter 7 or Chapter 13.
  • Chapter 7 is the most popular type of bankruptcy that most of those suffering from massive debt use to relieve themselves of their financial burden. The catch though with filing for Chapter 7 is that your assets can be seized and sold to your creditors, so you should check your state’s list of bankruptcy exemptions first to find out which ones you can keep.
  • On the other hand, Chapter 13 allows you to come up with a repayment plan that you’ll then have to show to your creditors as well as the court where you’ll be filing for bankruptcy. They can all then either agree with your proposed repayment plan or ask you to make some revisions to it as they see fit.
  • If you’re filing for bankruptcy as a business owner, you can opt not only for Chapter 7 or Chapter 13 but Chapter 11 as well, especially if you’re running a corporation or some other large-scale business.
  1. You’ll want to set aside a certain portion of your money though so that you can pay the corresponding fee charged to you by the court where you’ve filed for bankruptcy

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.

  1. You’ll also want to sort your debts out into those that can and can’t be discharged by your filing for bankruptcy

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.

  • It would thus help if you can separate all your dischargeable debts from your non-dischargeable ones even before filing for bankruptcy.
  • You should then settle all your non-dischargeable debts first by traditional means.

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.

Danny White

Related Posts

How to Improve Your Financial Situation

Comments Off on How to Improve Your Financial Situation

Things worth Knowing About Voidable Transactions and Validation Orders

Comments Off on Things worth Knowing About Voidable Transactions and Validation Orders

Best Cryptocurrencies You Should Consider Investing In

Comments Off on Best Cryptocurrencies You Should Consider Investing In

How Much Money Do You Need for Your Startup?

Comments Off on How Much Money Do You Need for Your Startup?

5 ways to Invest 1 lakh for better Returns

Comments Off on 5 ways to Invest 1 lakh for better Returns

Opening a Malaysian Bank Account

Comments Off on Opening a Malaysian Bank Account

Cloud Mining Monero. What Are The Best Mining Service Providers?

Comments Off on Cloud Mining Monero. What Are The Best Mining Service Providers?

Ryan Van Wagenen – International Opportunities In The World Of Finance

Comments Off on Ryan Van Wagenen – International Opportunities In The World Of Finance

What To Look for In a Holiday Home Insurance Policy

Comments Off on What To Look for In a Holiday Home Insurance Policy

WHY INVESTMENTS ARE ATTRACTIVE INVESTMENT OPTION INSPITE OF LTCG TAX

Comments Off on WHY INVESTMENTS ARE ATTRACTIVE INVESTMENT OPTION INSPITE OF LTCG TAX

Problems with Your Credit? What Is a Second Chance Credit?

Comments Off on Problems with Your Credit? What Is a Second Chance Credit?

Important Factors to Consider when Opening a Trading Account

Comments Off on Important Factors to Consider when Opening a Trading Account

Create Account



Log In Your Account