Bankruptcy is a good solution for someone with considerable debts, no income and no assets.
Usually, bankruptcy has the highest effect on those that actually have equity in property, some income to dispose of and people that have professional qualifications, because they are the ones who stand to lose the most. For instance, a lawyer should try to overlook bankruptcy because the result will be that they won’t be able to practice their profession.
It is possible for you to write to your creditors and look for an informal arrangement that will allow you to repay your debts over a specific and pre-agreed time. The only drawback to doing this is that it will not be legally binding and your creditor might choose to ignore it later on and look for direct payment.
If your debts are rather small, ranging between $5000 or less and you have a regular income, the court might agree to set up an order so that you can pay your creditors each month but through the court. Quite obviously, for debts this small, a credit union might be the best bet for you. Basically, these are just banks that are set up to direct your wages toward your debtors, but they will also help to diminish the payments for you and in some cases even remove some of your creditors all together.
If you have some bad debt problems, such as debts over $10,000, you might have to turn to bankruptcy in order to help yourself. You might also want to set up payment arrangements with your creditors. You can establish an agreement between you and your creditors that will enable you to pay back a percentage of the debt over a set period of time, which usually ranges from around five years.
The benefit of doing this is that you will have better control over your assets, fewer restrictions and won't be labeled as bankrupt. This is very good should you be running your own business. Nevertheless, sometimes, filing for bankruptcy is all that you can do. In this event, it will help to know the exact procedure. That is what the following section will provide you help with.
Keep reading, go to the next page of our bankruptcy recovery guide: Bankruptcy Procedure