Should I File For Bankruptcy- How To Answer This Question

2007-03-08 10:33:40

( Financial )



When I have reached the end of the line and all my financial resources have been exhausted, I begin asking myself, should I file for bankruptcy? This is a critical personal decision that you must make by weighing several factors and should only be considered as a very desperate last resort.

When I ask should I file for bankruptcy, I need to assess the financial situation, particularly how much debt I have and how capable I am of ridding myself of this completely. While you may have one or more creditors that are continually on your case, you should not resort to filing for bankruptcy simply because you think that this is the easiest way to get rid of them once and for all. You need to understand that filing for bankruptcy will affect your credit rating for as long as seven years and this may make it highly difficult for you to get back on track and apply for loans, credit cards and mortgages in the future.

The kind of debt that I have incurred is also relevant when I ask should I file for bankruptcy. Filing for bankruptcy is allowed for individuals and corporations but not for certain kinds of debts such as student loans, alimony payments, fines incurred from drunk driving and for fraud. Even if you file for bankruptcy, you will still be legally obligated to settle all these debts mentioned.

Timing of filing for bankruptcy is also important as this will affect your business considerably. If you think that you can talk to your creditors and ask for extensions on payment or work on a repayment plan with lower interest, then you should by all means do so. You should also be wary of your assets being seized or your properties being foreclosed when you have incurred high debts and should look out for all methods and means that can be done to avoid that this happens.


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