When an individual is unable to pay off his debts on time, then they can consider filing for bankruptcy as an option to get out of debt. A majority of the people use it as a last option. You can generally receive your discharge after one year if you are filing for the first time. Though your situation is made public, it could save you a lot of stress and get you a fresh financial start. It has become a logical, legal and valuable option for many to use to solve a difficult and challenging bad debt situation.
When your creditors file a petition against you, this is known as involuntary bankruptcy. Your creditors can choose to use this as an option to get back what is owed to them. You as the debtor can also choose to declare bankruptcy (voluntary bankruptcy) as a way to help eliminate debt. It is always wise to co-operate with your creditors once proceedings begin. Lack of acknowledgement will only make matters worse for you and an order can still be made. You can try and come to a settlement with your creditor(s) before proceedings begin.
Declaring bankruptcy has its consequences. Apart from the fact that your credit worthiness is affected and the financial implications there are also many social implications. This include losing control of your assets and also you cannot act as a company director. Trading in any business under another name is not allowed unless you inform all other parties concerned. Besides this, you are also not permitted to become a member of the local authority or even a member of parliament.
If you choose bankruptcy as an option, you should be ready to deal with the consequences. In long run though, you will have peace of mind and a brand new start.
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