It is a very extreme measure for an individual to declare themselves as being bankrupt. But if one takes this step at the right time, and in the right way, it can help that particular individual to save money while enabling them to have peace of mind.
However, the process of declaring to be bankrupt can not only be time-consuming, but also the process can be very expensive. It will, in the long run, have an enormous impact on one’s credit score. This can bring about a ripple effect to other financial engagements of one’s life. This can include; when applying for a job, acquiring a new car, or even purchasing a home. It is not good, therefore, to wait until you are completely broke so that you can declare yourself bankrupt because this will work negatively to you.
It is, therefore, advisable for one to explore all possible alternatives first before declaring bankruptcy, this is so because it brings about very significant and long-term financial effects.
Factors to consider when you want to file for bankruptcy
1. Do you have alternative means of paying your bills?
One should assess their schedule to determine whether they have any extra free time either, on weekends or evenings if there is, one is advised to take a second job at that particular time even if it is for a short period. This will enable them to have an extra coin to pay their bills. But if an individual has no other mean of financing the payment of their bills and they are broke, they will have no choice but to file for bankruptcy.
2. Consider if your situation is temporary
One should assess and determine if the situation they are in is seen as temporal or a permanent. For example; if one has lost their job they should identify if they qualify for any unemployment benefits or even how high or low are their chances of getting another job. Based on the assessment results of an individual they can determine if they can file for bankruptcy or not. This is to say that if a person looks at him/herself and finds out that the factors as mentioned above are working against them, they will have no choice but file for bankruptcy.
3. Will bankruptcy benefit you?
For one to qualify for bankruptcy it will not be a walk in the park; this is so because it is a very stringent process. If an individual had or still has a regular income, you need a good law firm like The Pope Firm to present and file for bankruptcy in accordance to Chapter 13, where an individual gives out a plan on how they will pay their debts over a period of two to three years using their disposable income. There is no need for one to subject themselves to such rigorous processes if they are not sure that filing for bankruptcy will benefit them. But if they think that it will be advantageous to them it is the right way to go.