Have you ever been stuck in a situation, say for example, a dysfunctional relationship, where every effort in trying to save it had been only gone in vain? And having no other options left, you finally decided to grab your last resort which is to end it? Financial dealings are similar in a way.
When bills are mounting up into a hopeless catastrophic heap and creditors are running wild after you like nagging wives, usually the only alternative is to file for bankruptcy.
But when is it really logical to apply for bankruptcy? At what point should a person cling to this option? How does filing for bankruptcy affect one's credit score and future transactions with financial establishments? If you are one of the unfortunate people whose credit has turned into an ultimate disaster, you better read on and reflect whether it is time to throw the towel into the ring and finally end your agony.
Educate Yourself Before deciding to apply for bankruptcy, it is a must that a person should weigh its pros and cons; otherwise, one might only be finding himself in a rather more difficult situation.
While it is best to consult bankruptcy lawyers regarding your options, they would still cost you money.
And in these situations every penny should be spent wisely.
So if you cannot afford to spend even a single dime, you better research the facts provided on the internet as well as in other resources.
Be informed and read as much as you can.
Don't Go Down Without a Fight Like in a marriage, a person cannot instantly walk away from it and go for divorce when things go out of hand.
It is important to try all possible ways to solve the problem in order to prevent bigger troubles from arising.
Applying for bankruptcy or bankruptcy itself causes serious repercussions on your credit record.
A bankruptcy listing will hurt your records.
It will stay in your records for ten years or more depending on how you are able to cope with it.
Not only that, it will also greatly affect your capacity to be granted of loan applications.
Financial institutions are more likely to refuse your loans because a bad credit record would also mean bad business to them.
So, as much as possible, try to negotiate with your creditors and apply for repayment plans, tighten up your budget, and find another source of income.
Filing for bankruptcy should be at the bottom of your list.
When Push Comes to Shove If at the end of the day, filing for bankruptcy becomes your only choice, you will need to gear up for some major changes in your lifestyle and relationships.
You will have to hire a lawyer to prepare the legal paperwork for you, and once it has been filed, the court will determine whether you are fully unable to pay your debts or loans.
If they have proven your financial incapacity, they will discharge of your debt but it will not include child-support payments and student loans.
Filing for bankruptcy should never be an option unless other alternatives have already been proven to be useless.
Bear in mind that bankruptcy would scar your credit history, so don't be too quick to settle on it.