Bankruptcy

Written by Liza Hartung
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Bankruptcy is a term that all of us have heard many times. We usually think that a person has become poor when they are bankrupt. Sometimes we wonder where he or she is to go from there. We have this pre-conceived notion that to be bankrupt is to be bad and irresponsible. In actuality, it can be one of the most responsible actions that a person can choose to take. It is not an easy decision, but it is the best one for certain situations.

By declaring that you are bankrupt, you are saying that you cannot possibly ever repay all of your debt. You will have to declare through a lawyer. If it so happens that your situation is valid, you are freed of your debt. All the companies that you owe money to, now have no right to ask for it. Some of you are thinking that this sounds wonderful. Some of you are wondering why you didn't do this earlier.

Let me tell you, though, having bankruptcy appear on your credit report for the next six to 10 years will not be fun. It will sit there in big, bold, red letters. You will have trouble getting credit cards, loans or making big purchases. If you can prove that you are making strides with your financial situation, you will have better luck, but it still won't be fun. However, it is a very good way to take financial responsibility of your life. In addition, you will feel a great weight lifted off your shoulders.

When Not to Declare Bankruptcy

Credit card companies and other agencies to which you owe money have the right to refute your bankruptcy claim. There are certain situations when they are very likely to do so. If you just went on a trip, made a big purchase, used a credit card when unemployed or spent money after consulting with a lawyer, you will look suspicious. It is always best to consult a lawyer or debt counselor before deciding to go bankrupt.


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