The subject of bankruptcy can be complicated, not least because a lot of emotions are involved. It might be that your business has failed, and you owe a lot of debt, or it could be because of personal insolvency. You might think that filing for bankruptcy is your only choice, and while it could be, it is always worth taking the time to research your options fully before you commit to a decision. But what options do you have and what’s the first step to take? Let’s take a look.
Speak to an attorney
If you are in financial trouble and bankruptcy is on the cards, make sure you consult a bankruptcy attorney. An attorney who specializes in bankruptcy will work for you to ensure that you get the best outcome. Finding a specialist means that your attorney will be able to work through all your possible options for you so that you face the least negative consequences. An experienced professional can help to make the process as stress-free as possible because they know the law, and they can guide you through so that you are not alone. Even though it will cost you to hire an attorney, without one, you are at greater risk of losing more because you do not fully understand the process or the laws surrounding insolvency.
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Try to negotiate
Filing for bankruptcy should be your last resort because it can have long-term consequences. If you are in debt, try speaking to your creditors before taking any drastic action and see if they can make your repayments more affordable. When you have an insolvency attorney on your case, they will be able to find the best option for you, and they may be able to negotiate with your creditors on your behalf.
If negotiations do not work or there is too much debt, then it may be time to file for bankruptcy. This is an incredibly tough decision that nobody ever wants to make but can sometimes be necessary.
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As part of the process, you will have to take part in credit counseling, and this can help you to avoid further financial trouble.
With Chapter 7 bankruptcy, your business will be appointed a trustee, and your assets will be liquidized so that your debts can be paid back. This may not include all your assets, and hiring a bankruptcy attorney can help to secure the best deal for you.
When you file for bankruptcy, you need to be aware that your credit rating will be severely damaged, and this means that you will not be able to get another loan or credit card. With Chapter 7 bankruptcy, this will stay on your credit record for ten years. There are other types of bankruptcy, including Chapter 13, and your attorney will be able to advise you on the most suitable one for you.
Ultimately, bankruptcy is a difficult decision, but if you have no choice, then make sure you hire a partner with a good track record who can work with you through the entire process.