Bankruptcy is a kind of declared inability of any individual or some organization to pay its credits. The creditors can file a petition of bankruptcy against the debtor. Likewise the debtor can declare bankruptcy and say that ‘I am not able to meet debts any longer.’ Now filing a insolvencyserve you any financial benefits. To understand this let us go through a brief bankruptcy assessment.
Bankruptcy Assessment
Some basic facts of bankruptcy are as follows:
* You can file it under Chapter 7 or 13.
* You must consult a lawyer well in advance and know the pros & cons of filing it.
* Remember it adds to the bad credit score for at least 7 years, so it is not that beneficial. You must think about it.
Here are some pros & cons of filing bankruptcy.
Pros:
* It wipes out all previous debts.
* Creditors usually decrease the debt owned.
* It gives you a fresh start. You may build a fresh and positive credit report.
* You may retain all of the assets. It depends on the Chapter you chose to do so.
Cons:
* You are supposed to wait atleast for 2 years before applying for any loan or credit card after declaring yourself a bankrupt.
* You are at a risk of losing some of your assets. This too depends on the chapter of bankruptcy being filed.
* You have to appoint a lawyer and pay him in advance to represent you in the future proceedings.
* Your credit scores suffer till the time you do not build up some good credit again.
* In case you again get into some debts then you cannot file it under any of the chapters for the coming 7 years.
Now once you are sure that you would take this step, you must have some core information.
* The general information that includes your name (s), residential address, mailing address, marital status, phone numbers, etc.
* Assets including your real property (financial description) and personal property (car, home, cash, jewellery, clothing, etc.).
* Debts that must have all the creditors’ names.
* Co debtors’ name(s) and addresses
* All sources of your income.
* All monthly expenditures.
* If you are married and are filing the petition individually, you are required to list the income & expenses of your spouse as well.
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