Should I Go Bankrupt?

Bankruptcy is a legal process through which a person or an organization is declared as unable to further pay off their debts. All the assets of the debtor are evaluated and used to pay as much part of the debt as possible. Even though every bankruptcy application is unique, there are still some commonalities that indicate whether one needs to seek bankruptcy help or not. Before one goes ahead with filing for bankruptcy, all the pros and cons are to be taken into consideration. When deciding if declaring bankruptcy is the only solution for you, here is a checklist that you must go through first.

Evaluate Your Financial Condition

In order to determine where you stand financially, you must list all of your assets down. Be they stocks, bonds, vehicle, savings accounts, retirement funds or real estate properties, make a rough estimation of all of your assets. Similarly, itemize all your liabilities such as car loans, bills, mortgages, credit card debts and estimate their total amounts. If your valued liabilities are more than your valued assets, one way you could escape this tough situation is by declaring bankruptcy.

Try to Negotiate the Debt

Before you make up your mind about declaring bankruptcy you should contact your creditors and see if they are willing to negotiate. Moneylenders are often willing to negotiate as they would prefer to get some of the loaned amount back rather than losing it all. Not just that but some even have cooperative schemes for people having difficulty in paying their debts.

Consider the Consequences

Declaring bankruptcy would result in the appointment of a trustee who will be in charge of managing your accounts. A trustee could be a person or an entity as decided by the court. Without the permission of your trustee you cannot travel out of the country. Any asset you acquire during the period of bankruptcy will automatically become the trustee’s asset. You would be unable to apply for some job opportunities and if your income is over a certain amount, you would be required to make compulsory payments to the trustee