The word “bankruptcy” is derived from the Greek word “bata” and it means to fail to repay a debt, which is basically all the debts of a debtor. When a debtor declares bankruptcy, he or she stops paying his or her debts, usually for a period of two years. However, he or she is not forced to let go of his or her assets; if the debtor wants to get them back, he or she has to prove that he or she can actually pay off his or her debts.
While a debtor can choose to declare bankruptcy on his or her own and to go through the process alone, many people are afraid of going through the court system and are afraid of having to face the consequences of declaring bankruptcy. There are also people who consider bankruptcy as an escape route from problems they are facing, such as divorce, separation, and loss of job.
If you decide to file for bankruptcy, your debts will be reduced drastically or even eliminated completely. You will have to make several payments that are highly unlikely to exceed 50% of your total debts, because the creditors will agree to accept less than the total amount of your debts.
Your credit score will be damaged and you will probably be unable to get a loan for many years. Nevertheless, you will probably still be able to purchase houses, cars, and some other luxuries. However, when it comes to financial matters, you cannot afford to make mistakes, such as allowing your debts to be transferred to a new creditor.
Bankruptcy may only last for a short period of time, but there is a possibility that it can last a lifetime. It is important to understand that bankruptcy should be only one option, because if you do not do your research well, you may end up hurting yourself more than you hurt your creditors.
In order to learn more about the situation of creditors, you may want to consult with a lawyer that specializes in this field. He or she will explain all the implications of bankruptcy to you and will advise you accordingly. You may also want to hire a bankruptcy attorney to help you with your finances, but remember that this is an expense that you will never recover if you do not have the right information.
People who declare bankruptcy usually fear the consequences of doing so. While it is true that a lot of people are affected by this condition, bankruptcy should be used as a last resort, and it is best to take care of the situation yourself before any trouble is caused. Although bankruptcy can cause some people to lose their jobs and their houses, it will give others a second chance at having a successful future.
People who declare bankruptcy may not realize it, but once they have their personal possessions, they will not have anything left to them after they have paid their debts. Some people use their houses as a form of collateral to help them out with their debts, but if they cannot find another home that is safe enough, they can always sell their houses and pay the money to creditors.
People who have small businesses may find it hard to start them again, since they cannot sell their properties and pay their debts. It is also a good idea to try to sell your home to raise money to pay for a new loan.
Bankruptcy is a good option for people who have no other option left but to go for bankruptcy. However, you have to know what the consequences of bankruptcy are and that it should only be considered as a last resort, when other alternatives have not been tried.
While bankruptcy is a legal term and an option that are available to people who have serious financial problems, it is advisable to go for debt consolidation, to avoid bankruptcy. Debt consolidation is a smart and financially sound decision.