Often, when people find themselves in a state of financial issues, they opt to declare bankruptcy. This not only allows them to regroup on the state of their financial situation, but it also allows them to start life on a new financial level.
Although bankruptcy can be scary for most people, it ends up being the best alternative for those who cannot cover the debts they have. It gives you rest and peace of mind since the creditors do not contact you for payments. You also get to restructure your approach to finances, which ends up being highly beneficial in the long run.
There are two ways you could end up in bankruptcy. First, it could be from a self-declaration when you realise you cannot pay off debts. Creditors could also push you to bankruptcy if you are unable to meet the terms of agreement you had when borrowing.
Some of the things most people are concerned about when they consider filing for bankruptcy can be summed up to four questions. These are:
- Is bankruptcy the best option for their situation?
- Do they get to keep working as employees or business owners?
- Will they lose their house and car?
- Does bankruptcy affect their pay?
When you declare bankruptcy, a trustee is appointed to head all your financial transactions. They take over all aspects of your finances for three years. Thus, before you consider declaring bankruptcy, you need to ensure that it is the best solution for your situation.
Effects of Applying for Bankruptcy
The appointment of a trustee to your financial operations is meant to empower your journey out of debt. They take charge of all the significant transactions and direct the money to clear your debt. When you come to us, we cover the basics of all your concerns and advise you on the best approach.
Most of the solutions we offer our clients include public insolvency, company liquidation, debt agreements and consolidation of loans, and small business bankruptcy. Each of the solutions we present to our clients is followed up with expert input on why we think they should consider a particular approach.
Once you declare bankruptcy, you might keep some household items which are not of high value, cars with low credit. Your income is regulated based on the number of dependents you have. You keep paying off any court fines, child support, or higher education loans you have through the bankruptcy period.
You might lose high-value assets, and you will be registered on credit reports. This will hinder your attempts to access loans and credit for a period.
Responsibilities During Bankruptcy
Declaring bankruptcy is the first step to reclaiming your financial capacity. For you to successfully get out of debt, you need to be disciplined. Our job is to act as mediators between you and your creditors, we receive phone calls on your behalf and answer all questions for you. We also prepare files for your declaration and advise you on the best alternatives for your situation.
Despite all of our input, the process requires your contribution for it to be successful. You will need to;
- Give a clear summary of your financial situation
- Sign a client agreement
- Provide timely updated for any change in your finances
- Settle all the required payments
- Consolidate an income report
Before you make your move, bankruptcy advice from NR Consulting.