My wife and I made the decision to open a residential cleaning business. We needed enough money to get the equipment, do a bit of advertising and get the licensing and insurance to protect ourselves and our customers. For about two years, things went very well, but then, things took a terrible spin for the worst after we hired a few employees to help us with the workload. Since then, we have gone bankrupt and have gone back to working full time jobs. If you are struggling with your business and considering bankruptcy, this blog can give you some answers to the many questions that you have.
Most people view bankruptcy as if it's the end of the world. Everyone typically wants to avoid bankruptcy until there is no other option. Surprisingly, bankruptcy is not always a bad thing as most people view it. You can use it as an opportunity to better yourself financially.
All in all, you should not hurry to declare bankruptcy before you think about the aftermath. Compiled are a couple of questions you might want to discuss with your bankruptcy attorney. These questions will help you decide if you are ready to go through the bankruptcy process.
Should You Apply for Chapter 7 or Chapter 13?
When declaring bankruptcy, you need to decide whether to go for chapter 7 or chapter 13 bankruptcy. Both are different, and each has its unique perks as well. You can choose chapter 13 if you have an income and assets that you don't want to forfeit. Luckily, chapter 13 bankruptcy allows you to set up a repayment plan; thus, giving you enough time to clear your debts.
On the other hand, chapter 7 bankruptcy requires you to sell assets except for your furniture, clothing, and car. Ensure you talk to your bankruptcy attorney to help you decide which option is good for you.
Are You Eligible for Bankruptcy
Most people prefer to file for chapter 7 bankruptcy as it erases most of their unsecured debts. However, you can't just wake up one morning and decide to file for bankruptcy. You have to pass a means test for the court to determine that you qualify for bankruptcy. Even if you fail the means test, you might still be eligible for chapter 13 bankruptcy.
Can You Deal with the Effects of Declaring Bankruptcy?
Although declaring bankruptcy can erase most of your secured debts, it has its fair share of cons. For instance, the bankruptcy situation will reflect on your credit report for ten years or more. This means you can't get a loan, insurance, or a high corporate job. Besides, bankruptcy records are always made public, meaning anyone can have access to them.
What Kind of Debts Will Be Cancelled?
If you want to file for bankruptcy, you should know the kind of debts that will be erased forever. Some of these debts include:
While chapter 7 bankruptcy is good at eliminating various debts, it is difficult to get rid of student loan debts and tax debts. Besides, banks and credit card companies can ask the court not to discharge your debt if you lied on the credit application.
Reach out to a bankruptcy attorney near you to get started with the bankruptcy process.
Share