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Getting out of debt can be one of the hardest things you ever attempt to do. Forget about your finals in college, forget about your driving test, this is a real challenge. It’s a battle that many people struggle to win, causing their lives to spiral out of control and leaving them in a total pit of financial despair.
This is what brings us to the topic of bankruptcy. Many financial experts claim it’s a viable option for people in debt. The idea is that you declare bankruptcy, and have your debts wiped out. Well, that’s the basic idea, but will it work for you? If you’re in debt, then read the points below to find out if you should declare bankruptcy to get out of it.
How Does Bankruptcy Work?
When you owe lots of money to lots of people, you can declare bankruptcy. No, this isn’t as simple as walking out into the middle of the street and screaming “I declare bankruptcy” like Michael Scott from The Office. In reality, it’s a long process that requires all sorts of legal issues here and there.
You have to file for bankruptcy, present your evidence, and get it approved. It’s well worth getting a free bankruptcy law consultation from a local attorney to help you understand all that’s involved. Once you’ve gone through all the various legal procedures and submitted your request, you will wait for approval.
If approval is granted, then you can set the wheels in motion. Being declared bankrupt means all of your assets get seized from you. This means your car, some of your personal possessions – anything of value. If you don’t own your house, then that gets taken away too. If you do, you’ll most probably be ordered to sell it.
Your assets will then be used to pay off all your debts, leaving you with a clean slate. In many ways, it’s very similar to when you declare bankruptcy in a game of Monopoly. All your properties on the board go to the person that owes you money, they use your assets to gain what you owe.
You’ll remain bankrupt for a year, in which time you won’t be able to do certain things like apply for large amounts of credit. When the year is up, you’re free to do as you please.
— Mister Race Bannon (@MrRaceBannon) January 23, 2018
Who Will This Help?
If you’re in debt, but you feel as though you can eventually pay it off somehow, then bankruptcy isn’t for you. It’s a last resort, something you should only do when you’ve tried everything else. So, if you get into some credit card debt, don’t immediately start filing for bankruptcy to get out of it, this won’t work.
To answer the initial question; can bankruptcy help you get out of debt? The answer is yes, it most certainly can. But, and this is a big but, only if you’re severely in debt to multiple people and organizations. Also, many debts can be wiped out via bankruptcy, like credit card debt and payday loan debt. However, certain debts can’t be wiped out, like if you owe private companies money, etc. So, it’s definitely an option, but only as a last resort.