Bankruptcy – what does this word mean to you? What type of reaction does it generate from you? Also known as insolvency, bankruptcy generally generates fearful reactions from people because they tend to consider it as something negative. This couldn’t be further from the truth. The truth is that there is no need to fear bankruptcy unnecessarily. If you push the misconceptions surrounding this concept aside then you will actually realize that insolvency can actually bring a lot of valuable resources to the insolvent person. The best way of dispelling or getting rid of these fears would be to get yourself educated about insolvency and also about what’s truly in store for you when you become bankrupt.
Individuals who are on the verge of becoming bankrupt would benefit from hiring a bankruptcy attorney because such an individual would be able to help the troubled person in matters like handling nagging creditors, individual liquidity status and other matters. Since a bankruptcy attorney has the right kind of experience and knowledge therefore they will be able to provide you with valuable advice as to how you should go about dealing with bankruptcy. A good insolvency lawyer or attorney is one who does not take his/her clients as simply clients but act more like a confidant with them.
Good planning is the main element in almost anything in life if you want to save money. So also, this concept applies to insolvency filing, if you want to step out of insolvency with a successful discharge then you should invest some time in proper planning along with your lawyer. You need to make certain financial decisions in order to prepare yourself for bankruptcy and to avoid disastrous results. If there are some bankruptcy questions that are circulating in your mind then now is the right time to ask your attorney.
Among the major issues surrounding the concept of insolvency, one of the major ones is that insolvency can cause major damage to one’s credit. A majority of the people are under the impression that if they become bankrupt then they would end up with a bad credit record. This is completely false because insolvency is not the factor that damages one’s credit rating. The true factors are late or missed payments, unpaid debts, delinquent account standings, etc. However, insolvency does make the task of securing future credit a bit more tough or challenging.
Despite the fact that insolvency can cause problems in attempting to secure future credit, there are plenty of benefits that insolvency offer, which kind of make up or that one disadvantage. The first advantage is that insolvency gets rid of one’s negative account histories, which means that the person has the opportunity to start anew as far as rebuilding of credit record is concerned. Secondly, the challenges which are associated with getting a new credit after insolvency will only teach you a lesson so that you will be limiting yourself to only those lines of credit which you can afford. This way you will be able to keep away from trouble and only concentrate on positive money management skills and techniques.
One of the most common bankruptcy questions of people associated with insolvency is that they are afraid that their assets would be liquidated for the purpose of paying off the debts to their creditors. The truth is that this doesn’t always have to be the case. There are certain bankruptcy exemption laws which would protect the bankrupt individual’s properties. According to chapter 7 only disposable income or the money generated from the sale of non-essential properties or assets would be used for debt satisfaction. Thus, the bankrupt person’s car, clothing, furniture, house and essential funds such as insurance or retirement benefits would be protected by the insolvency exemption laws.