Racking your mind trying to figure out what to do with your overwhelming debt? You’ve tried all of the possible debt solutions, eventually bankruptcy is what left on the list. Going bankrupt appears to be the only reasonable option for you to choose. You almost made your mind but still have a nagging doubt about filing bankruptcy. Is that really what is right for you?
Obviously, going bankrupt is what people in debt consider to be their only way out. And that is so true. I remember myself when I had to look into all possible options to get myself out of debt. Going bankrupt was an option as well. Even though it was a last thing I would accept as a solution. Fortunately, my case was relatively mild. Anyways, I was dying to know what bankruptcy was all about. And also what is expected in case I would’ve filed for bankruptcy. Here is what I’ve found out.
For openers, going bankrupt can eliminate your debts considerably. A great idea at first sight, isn’t it? But it’s not that easy to my big regret.
Before you get excited make certain you understand everything correctly. You’ll need to figure out the nature of your debt before you decide on going bankrupt. This means that, depending on what kind of debt you have it can be cancelled or not after you declare yourself bankrupt. Defining the nature of your debt can give you a hint whether you took the right option or not. So before you make your mind analyze what kind of debt you have. Is it secured or unsecured?
In fact, secured debt is guaranteed by an asset. A mortgage or a car loan can be a good example of secured debt. If you have one and fail to make payments to the lender, the latter reserves the right to take these assets from you. So keep in mind that your home or car will be at stake if you decide on going bankrupt.
The rest of the debts which aren’t guaranteed by assets are considered to be unsecured. They will be cancelled as soon as you make your mind on going bankrupt. These include credit card or any kind of personal debts you may have.
Although, there are debts that can’t be cancelled. These are child support, taxes, student loans, alimony, etc, so called non-cancellable debts. It will take you a certain number of years to pay off your debt even thought you’ve decided to declare yourself bankrupt.
On the whole, to make decision on whether going bankrupt is right for you or not, you will need to examine your situation in details. Going bankrupt means that you’ll have a great chance for a new start. Don’t let it go by.
Sherry is a Blogger who writes about personal finance, debt and bankruptcy. You can find her blog at: Canada Bankruptcy