Declaring Yourself Bankrupt – What You Should Know

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Not so long ago, banks and financial institutions were falling over themselves to lend money. Now the situation has changed radically, making credit much harder to obtain and making life very difficult for many as they struggle to manage high levels of debt accrued in the good times.

Credit cards have played a major role in this. We all know how easy it is to live beyond one’s means by supplementing our spending with credit card debt. The problem is that it has to be paid at some stage, and for some, just the monthly interest is more than they can afford.

Of course, one can buy some time by transferring some credit card debt to a card with a lower interest rate, but this does not solve the problem.

Declaring yourself bankrupt should only be considered when all other options have been examined in detail. The appeal of bankruptcy is the lure of starting one’s financial life again, with all debt taken away, a fresh start.

You also need to be wary of the plethora of companies that have appeared in recent months to “assist” with bankruptcy.

If you decide bankruptcy is the way forward, then you should hire an experienced bankruptcy lawyer. They are not cheap, but they will explain everything fully and in detail, and take you through your options. This is one area of expense that should not be scrimped on – your financial future depends on it.

Strange though it may seem, just being unable to meet your debts does not mean that you can automatically go declaring yourself bankrupt. There are grounds for ineligibility, as follows.

If in the last 180 days you have, of your own accord, dismissed your own bankruptcy case you are ineligible.

If you have been issued with a bankruptcy discharge within the past 7 years, you are not eligible to file again.

If you have had a petition for bankruptcy discharged (you did not adhere to the bankruptcy code of practice) in the last 180 days you are ineligible.

Assuming you do not fall into any one of those criteria, you may proceed.

Chapter 13 and Chapter 7 are the most common chapters to file bankruptcy under although there are others. Your lawyer will advise.

Chapter 7 results in you losing virtually all of your personal property with the proceeds used to pay off as much debt as possible (after which any outstanding debt is no longer your responsibility), while chapter 13 is essentially a repayment plan, where you keep most of your possessions and repay all your debt over a 3 to 5 year period.

For more helpful information about declaring yourself bankrupt, including guidance on things to consider prior to filing and guidance on lawyers, visit www.declaringyourselfbankrupt.net.

categories: Bankruptcy,Liquidation,Insolvency,Finance,Money,personal finance,Banking,financial health

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Tags: banking, Bankruptcy, Finance, Financial Health, insolvency, liquidation, money, Personal Finance

Article Citation
MLA Style Citation:
Tremerituus, Bob "Declaring Yourself Bankrupt – What You Should Know." Declaring Yourself Bankrupt – What You Should Know. 20 Apr. 2010. uberarticles.com. 14 Apr 2012 <http://uberarticles.com/finance/bankruptcy/declaring-yourself-bankrupt-where-to-start/>.

APA Style Citation:
Tremerituus, B (2010, April 20). Declaring Yourself Bankrupt – What You Should Know. Retrieved April 14, 2012, from http://uberarticles.com/finance/bankruptcy/declaring-yourself-bankrupt-where-to-start/

Chicago Style Citation:
Tremerituus, Bob "Declaring Yourself Bankrupt – What You Should Know" uberarticles.com. http://uberarticles.com/finance/bankruptcy/declaring-yourself-bankrupt-where-to-start/

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