Credit score drop up to 240 points
Simply put, bankruptcy is when you owe more than you can afford to pay. To determine where you are financially, inventory all of your liquid assets. Don't forget to include retirement funds, stocks, bonds, real estate, vehicles, college savings accounts, and other non-bank account funds. Add up a rough estimate for each item. Then, collect and add up your bills and credit statements. If the value of your assets is less than the amount of debt you owe, declaring bankruptcy may be one way out of a sticky financial situation. However, bankruptcy shouldn't be approached casually. After all, it's not a simple, easy cure-all for out-of-control debt.
You can go bankrupt in one of two main ways. The more common route is to voluntarily file for bankruptcy. The second way is for creditors to ask the court to order a person bankrupt.
There are several ways to file bankruptcy, each with pros and cons. You may want to consult a lawyer before proceeding so you can figure out the best fit for your circumstances.
In some cases, bankruptcy may be your only real option. When filing for bankruptcy, you can choose between a Chapter 7 bankruptcy, which will have the effect of eliminating your debt, or a Chapter 13 bankruptcy, where you arrange to pay back some or all of your debt over a fixed period of time.
We can help you determine which is right for you. Give us a call for a free consultation.