File Bankrupt

2007-05-15 06:10:46

( Financial )



File bankrupt means that you are declaring to the society that you are no longer capable of paying your financial obligations. This is the reason why this option should be considered your last resort if you are sure that everything else failed.

You should also be aware that when you file bankrupt, it would also be reflected to your financial records. It would be more difficult to apply for a loan especially if lending companies know that you had declared for bankruptcy in the past.

BANKRUPTCY HAS MANY FORMS

Although when you file for bankruptcy there is just one end result, the details to how you file for bankruptcy may differ from others. This is true because the bankruptcy code deals with all types of bankruptcy cases but is further subdivided so that your specific case can be handled.

Some examples of specific case would be for business owners, farmers or for other types of people with existing debts. One usual procedure is that you, as the debtor, must give up some of your belongings to pay off your debts. The extent to what should and shouldn’t be taken can be determined through the bankruptcy code.

One popular term known as reorganization can be applied for businesses. Basically, the business will be reorganized so that it is possible for business owners to pay their existing debts. Most of the time, you have to prove that you have a steady source of income before they will grant your application.

SHOULD YOU FILE FOR BANKRUPTCY?

Filing for bankruptcy can greatly reduce your credit rating and you should be aware that it is important to have a good credit rating. Before trying file bankrupt, you should seek help from a financial adviser and try other alternatives first. If ever you want to continue, focus on how you can pay off your debts as soon as possible so you can improve your credit rating.


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