If you are unable to pay your debts, Bankruptcy may be an option for you. During a bankruptcy, the court takes over your financial affairs for a limited period of time. The court is entitled to seize and sell your assets – including your house and other possessions – to pay off your creditors.
When is Bankruptcy an option?
Bankruptcy is an option if your debts are unmanageable and you feel there is no other viable debt option. Bankruptcy can be forced upon you if your creditors petition to the court because of missed payments.
The bankruptcy process generally lasts a year, but will remain on your credit file for a minimum of 6 years. During the time the bankruptcy is on your credit file, your ability to obtain new credit accounts will be greatly diminished. In general, it will become easier to obtain new credit as you near the end of the bankruptcy term. Something else to keep in mind – while your bankruptcy may discharge within a year, the court may ask you to make contributions from your income. These contributions may last for an additional two years.
Bankruptcy is a serious financial move and will have profound affects on obtaining future credit. As such, it is best to evaluate all other debt options beforehand. On our website, you can read about the advantages and disadvantages of bankruptcy. If its the right solution for you, contact us and lets get you on a path to financial recovery.
In a complicated financial world, you need to depend on professionals to offer you the right debt strategy. There is a variety of other debt strategies to consider before declaring bankruptcy – all of which would have a far smaller impact on your future credit ability.