Monday, November 5, 2012

Should I Delay Bankruptcy?

The actual bankruptcy process comes with many decisions, some of which are difficult. For people it can be devastating but for companies it can be a lighter since they have many solutions like pre pack insolvency, administration and a whole lot more. Although it is a fantastic tool of debt relief, it’s not necessarily the best choice for everybody. If you are considering filing for bankruptcy, think about a few things before you file your case.

Important Factors

First, ask yourself if you are truly financially insolvent. In other words, are you currently unable to meet your debt commitments to one or more creditors? Have you missed a payment because you don’t have the money to cover the expenses of making a payment? Answering "Yes" to these questions could be an indication you are financially insolvent and should seek guidance about your debts. If you do not feel you fit this category and are confident you can catch up on missed payments quickly, bankruptcy may not be for you.

Next, assess the status of your assets. Do you have any kind of secured assets that could beat risk of repossession or foreclosures if you default on your payments? Have you already received a notification of repossession or foreclosure? Answering "Yes" is a solid indicator that you need to consider bankruptcy, which can stop any impending, or presently, active liquidation proceeding. Answering "No" to either of these questions might mean that you can resolve your debt outside of bankruptcy, such as directly with your lender.

Also, take a look at your latest financial history. Have you paid off any debts in the last six months? Have you accumulated new debts in the last 3 months? Has your income level increased in the last few months? Answering "Yes" to these questions could mean you need to hold off on filing for a couple of months. Why? Because changes to your debts, assets or even income immediately preceding a filing could influence whether you are eligible for bankruptcy or be viewed as suspicious. Answering "No" to these questions is a green light to go onto the last consideration.

Last, make sure you have reviewed all of your options. There are numerous ways to resolve debts, such as through credit negotiations, debt consolidation and debt settlement. It's important that you simply consider the risks and benefits of each of these solutions against your financial scenario before pursuing bankruptcy. If you have yet to consider any of these options, do so before you file for bankruptcy. Seeing a bankruptcy attorney can help you determine whether bankruptcy is the best option for your scenario.

For more information check out Finance7.

No comments:

Post a Comment