Everything You Need To Know About Bankruptcy

Everything You Need To Know About Bankruptcy

When we hear about bankruptcy, we tend to point fingers at people who go on shopping sprees. We associate it with people who cannot resist temptation. The media portrays bankruptcy as a scary proposition that seems to affect giant companies and famous people falling from bedrock to bankrupt. Before looking for bankruptcy attorney Cape Cod, here are a few things you should know. 

Anyone can go under 

Bankruptcy can befall anyone from personal to corporate. Sadly, most of it has little to do with self-indulgence or inability to resist shopping temptation. Adults’ failure to pay medical bills is the leading cause of bankruptcy. According to Kaiser Family Foundation, medical issues account for 40% of racked up debts. Surprisingly, some folks with insurance coverage are also affected. 

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When to Declare Bankruptcy 

Gossip columns are fond of dishing on celebrities and large businesses for going under. What they do not tell us is that we may be a few steps close ourselves. Currently, we live in a world filled with credit card offers and having debt remains an accepted norm. Here are a few indicators that you are in a financial danger zone: 

  • Minimum payments made on credit cards 
  • Bill collectors looking for you 
  • You are scared of sorting your finances 
  • Using credit cards to pay for necessities 
  • You do not know your debt amount 
  • You are thinking of debt consolidation 

Analyze Your Situation

If most of the conditions above describe you, you need to take time to analyze and understand your financial state. Bankruptcy is only valid when your debts surpass what you can pay. 

To determine your current financial capability, list all your assets. Assets include real estate, retirement funds, college savings, stocks, and funds in the bank and cash at hand. Estimate their values and add them. Compare the total asset value with the amount your debt. If the assets are less than liabilities, declaring bankruptcy is a viable option to get out of the financial outlandish. However, bankruptcy is not cakes and ale. 

Bankruptcy Declaration Procedure 

There two ways to getting a bankruptcy declaration, namely: 

  • Voluntary filing for bankruptcy 
  • Creditors asking the court to order an individual bankrupt 

Technically, there are many ways of filing bankruptcy. You may want to consult a bankruptcy attorney Cape Cod for the best approach. 

Straight Bankruptcy 

Straight bankruptcy is also referred to as chapter 7 bankruptcy. Under this method, your assets are liquidated to pay your debt. The cash obtained are distributed to your entire creditor including banks and credit card providers. 

After four months, a notice of discharge is sent to you. However, the record of bankruptcy remains valid for ten years. Not all is lost as buying  some properties with a bankruptcy record is possible. The method is unsuitable if you want to keep some assets and companies. 

Reorganization Bankruptcy/ Chapter 13

Chapter 13 bankruptcy is perfect for people who want to hold on to some assets. It gives them a longer period to pay off debts. If you have a consistent and predictable income, this approach gives you a grace period. 

Getting help with debt management is difficult. Bankruptcy attorney cape cod understand what you are going through and follows the laws needed to protect you and creditors. Get in touch with one today to end a horrible financial nightmare. 


 

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