Read Articles:


 What to Consider when Filing for Personal Bankr...

 Bankruptcy 101

 Do You Need Bad Credit Help

 The Ins and Outs of Credit Card Debt Settlement

 Canadian Debt Consolidation

 What You Don't Want to Know About Bad Meetings

 Multiple Clients Create Your Independent Business

 Need an Idea for a New Business - Hair & Beauty...

 How do commercial debt reduction companies work?

 Alternative Venture Finance: Shell Corporations

 Securing a Debt Consolidation Loan

 How To Set Up A Professional Home Office

 Corporate Shells

 Beware Of Bad Credit Payday Loans

 Business Laws: What you Need to Know

 How to Cut Credit Card Debt

 MORAL ARMOR'S Economic Warning for Americans

 MLM Success Training: Why Some People Become We...

 Government Grants - What are they and how to ge...

 Factoring Financing: How to grow your business ...

 Is Cold Calling Dead?

 Bottleneck-oriented Business Management

 Stuck With A Zero Marketing Budget For Client G...

 The Art of Employee Motivation

 The Importance of Personal Background Checks -

 Achieving Financial Security in an Unreliable E...

 Short Sale Success Secrets with Foreclosures

 Incorporating Your Business Using Three Simple ...

 Forgive All Ebay Sins!

 The Secret of Credit Card Numbers

 High Volume Merchant - Do You Need One?

 How To Get Your Contact Details Across: When Th...

 Consumer AdviceWhat is identity theft?

 Are Corporate Awards and Corporate Gifts Benefi...

 Enjoy The Benefits Of A Credit Merchant Account

 How To Avoid Being A Victim Of Ebay Buyer’s Fraud.

 High Volume Merchant Accounts

 Don't Get Hacked - Best Practices For Protectin...

 The Do’s and Don’ts of Giving Feedback

More Article Pages 1

 

How Bankruptcy Works
 by: John Mussi

Bankruptcy… a frightening word with serious connotations. In recent years governments have been cracking down, making penalties for bankruptcy more severe in an attempt to make them more difficult to attain so that only those in serious need can apply for them.

Despite the negative image that is associated with bankruptcy and the various problems that come along with declaring a bankruptcy, it doesn't have to be frightening; after all, bankruptcy was designed as a way for those individuals and businesses who find that their finances are out of control to get the help that they need to organize their finances and pay off their debts.

Once you take the time to understand what bankruptcy is and how it works, you won't find it as scary as you did at first.

Defining Bankruptcy

Bankruptcy is a legal term, meaning that an individual cannot within reason pay off their various debts and have allowed the court system to take over their finances for this purpose.

When filing for bankruptcy, the court will appoint someone to work out the payments to your creditors and to determine how much of your income must go to repay these debts. The court will either allow you to make payments, or more likely will deduct a portion of your paycheck toward this goal.

During this time, your credit will be limited… both by legal action and by the reluctance of creditors to issue credit lines to individuals who have declared bankruptcy.

Once the total amount set by the court has been repaid, the bankruptcy will be discharged and you will be able to start rebuilding your credit from the ground up.

Different Types of Bankruptcy

Several different types of bankruptcy exist, defined by legal codes for certain purposes. The exact types of bankruptcy available differ from one country to the next… in the United Kingdom bankruptcy can only legally be applied to individuals and partnerships, whereas in other countries such as the United States or Canada they can be applied to businesses as well.

Regardless of the limitations or allowances set by the government on who is allowed to declare bankruptcy, the general purpose of bankruptcy remains the same.

Lasting Effects of Bankruptcy

While you are working towards discharging a bankruptcy, your options for credit will be exceedingly limited. Even after you've had your bankruptcy filing discharged, though, you'll still find that you won't have many options for a while… many creditors will still be hesitant to work with you from between six months to two years depending upon the creditor and the service that you're applying for.

You should also take care with any offers that you do receive, because they will likely come with high interest rates and additional fees attached.

Life After Bankruptcy

Bankruptcy isn't the end of the world… it's actually a chance for a new beginning. As time goes by, the bankruptcy on your credit report will begin to matter less and less as you eventually start to establish new positive credit lines and build up your credit again.

Just like negative reports, your bankruptcy will eventually expire from your credit history; the process may take up to seven years, and until it expires there will still be those who are hesitant to deal with you.

Once it expires, however, the negative reports that preceded it will also be long gone… and you'll find that your newer reports are all that remain.



©2019 - All Rights Reserved

Boost Web Traffic! Exchange! Views of your website!