If you’re like me, you’ve probably tried typing in “bankruptcy definition” in the search bar in an attempt to get a better grasp of what bankruptcy is.
That’s probably how you ended up here.
Declaring bankruptcy attacks a person’s ego because whatever the circumstances are that brought it about, this is the person’s way of saying that they have no money or no means to pay off debts.
Today’s article delves into bankruptcy — the basics, the tips, and the way to avoid being bankrupt. After all, it’s always good to be informed.
Get started with a few basics of bankruptcy.
Here’s a rundown of the bankruptcy definition and a few types of bankruptcy you may want to familiarize yourself with, just in case.
Knowing what the bankruptcy definition really is and how it works means breaking down the facts.
Read on to know the pros and cons, debts that are not qualified for bankruptcy, and why you should make sure bankruptcy is your last resort.
Though bankruptcy is said to be a shield of protection, one of its main disadvantages is its effect on your credit score.
You’ll have an incredibly low credit score for the next 7-10 years after filing.
Check out a few of the items you should look out for before you file for bankruptcy.
Chapter 7 bankruptcy is also known as straight bankruptcy or liquidation bankruptcy.
If you qualify for it, you’ll find yourself working with a trustee.
This trustee is the one in charge of selling your assets.
Once the assets are sold, the money is given to your creditors who have filed proper claims. Don’t despair.
You’ll still be left with a good number of assets to help you start anew.
It’s important to know the type of bankruptcy you’d need to file for.
Doing so will greatly help you in understanding the different steps you need to take.
In turn, this also makes you even more prepared for the changes coming your way.
Did you know there are costs involved in order to push through your bankruptcy application?
Yes, aside from the legal fees you’ll incur, there is also a filing fee dependent on the type of bankruptcy.
The good thing is, the government usually allows installment payments for bankruptcy costs.
In the middle of a debt crisis and don’t have a clue on what to do next?
Hopefully, this step-by-step guide will come in handy!
Start by identifying the items that got you into debt in the first place.
After all, don’t they usually say acceptance is the first step?
Sometimes a little extra help is needed for you to move on to the next phase of your life.
One example is finding a bankruptcy lawyer who can help move the process along.
Your attorney should be someone who can give you the best advice.
S/he should take the time to study your case and your full history in order to help you proceed with the next steps to take.
Here are a few things to look for in a bankruptcy lawyer.
Debt consolidation companies work by gathering all your current debts into a single payment.
They are highly suggested for those who prefer a more streamlined and easy to remember debt payment scheme.
Bankruptcy can always be avoided.
One secret is to simply say no to unnecessary expenses.
Small daily expenses may amount to nothing during the short term.
Over time, they can empty out your savings.
At the bottom of it all, it’s really just about being in control of your own money.
They say prevention can be better than the cure.
That being said, prevent bankruptcy from happening to you and your household with these 5 tips.
How do you know when to save and when to splurge?
What makes a need different from a want?
Find all these answers in this article.
These financial tips can be practiced as early as high school.
It’s all about instilling the discipline and knowing the value of money.
Once you make these 5 tips a habit, you’ll soon see yourself becoming more frugal with the way you spend your hard earned cash.
Find out more about bankruptcy by pressing play on the video below. It’ll teach you about the differences between Chapter 7 and Chapter 13 bankruptcy:
It goes without saying that you should be very careful about the way you use your money.
Just because you have the cash to burn doesn’t mean you shouldn’t take your expenses wisely.
Set budgets and limits for your monthly expenses and never spend beyond your means — lest you fall into a state of bankruptcy.
Do you have additional tips on how to avoid bankruptcy? Share them with us in the comments below!
Up Next: Do You Know About the 50/20/30 Rule?
Chapter 11 bankruptcy isn't uncommon, yet many fail to see its purpose. Most people have…
Applying for personal loans after a bankruptcy discharge? Getting approved may not be easy, but…
Student loan wage garnishment is the last thing you want to experience while paying student…
Here's what happened on Financial Wellness 1. How to Start Investing in Stocks Even With…
Trashing your credit score is so much easier than building a solid credit rating. It's…
Does debt consolidation hurt your credit or not? Consolidating your debt sounds like a good…