Bankruptcy is a legal term that all of us have heard over and over again. We
usually think that a person has become poor when they are bankrupt however that
is usually not even close to the case. We have this pre-conceived notion that
in order for us to be bankrupt, we are irresponsible and lazy. In the real
world, it can be one of the most responsible actions that a person can choose
to take when it is really necessary. It is not an easy decision for most people
to make, but it is the best one for certain situations.
When you start declaring that you are bankrupt, what you are basically
saying to your creditors is that you cannot possibly ever repay all of your
debt. You will have to declare bankruptcy through a lawyer. If it so happens
that your situation is a valid one, you are then freed of your debt. All the companies
that you owe money now have no right to ask for it. This may sound awesome at first;
however, it does have its draw backs as well.
Let me tell you one thing though, having something like a bankruptcy appear on your credit report for
the next six to 10 years will not be even close to beneficial to you. It will
sit there in big, bold, red letters in your credit report for a very long time.
Because of it, you will have trouble getting credit cards, loans or making big
purchases even though ironically, these may the very things that cause you to
declare bankruptcy in the first place. If you can prove that you are making
some real strides with your financial situation, you could find it less
difficult to get financing but not very. However, it is a very good way to take
financial responsibility of your own life. Not to mention, you will feel a
great big burden being lifted off your shoulders.
Credit card companies and other creditors where you owe money really do have
the right to say no to your bankruptcy claim. There are certain situations when
they are very likely to do this too. If you just went on a vacation, made a big
purchase, used a credit card when unemployed or spent money after consulting
with a lawyer, you will look suspicious in their eyes and will likely be denied.
It is always best to consult a lawyer or debt counselor before you really take
the plunge and declare bankruptcy.