One of the most dreaded words related to finances is bankruptcy. As expected, there is a negative connotation when you hear this word. Since we all, in one way or another, handle finances whether for personal or work, we need to be aware what bankruptcy really means.
What is bankruptcy?
Bankruptcy is a term that is legal in nature. Specifically, it is a situation wherein a person or a business no longer has the capacity to repay an outstanding debt. When one files for bankruptcy, a legal proceeding is conducted so that the debtor’s remaining assets may be assessed as part of a payment option. Once the proceeding is completed, the debtor will no longer have debt obligations.
What are the signs that you or your business is heading for bankruptcy?
The calls of your creditors are becoming unbearable
The letters coming from your creditors are becoming unbearable
When paying your credit card balance, you only pay the minimum amount
You tend to borrow money more often now compared to before
Your checks tend to bounce because funds are not sufficient
You have received a foreclosure
What are some effective ways to avoid bankruptcy?
If possible, you can sell some of your assets
Contact your creditors and ask for some possible options that they can grant you
Get help and support from your family and friends
Explore options that will help you mitigate the possible financial loss
Be open to opportunities that will be presented to you
These are just some of the important things that you need to know about bankruptcy. If you find yourself in this situation, do not panic. Focus more on what you can do rather than sulk in misery for an impending bankruptcy.