Bankruptcy can be defined as the legal status of an individual or a company that can’t repay its debts to its creditors. Generally, bankruptcy is usually enforced by a court order following an application by a debtor. Bankruptcy is never a good position to be in, however from a legal and financial standpoint, it may be very necessary.
In this article we will look at the 3 main reasons you should consider declaring bankruptcy.
1 It will save you from getting auctioned
The moment you obtain a court order that has approved your application for bankruptcy, then any legal action that had been initiated against you by those you owe money to will be halted. These include auctions, foreclosures, and lawsuits, and even wage garnishments.
2 It will give you an opportunity to start a fresh
Once you successfully obtain a court order that declares you bankrupt in most cases all your debts will be cleared therefore giving you a clean bill to start on. It’s however important to ensure that your legal team has dotted all i’s and crossed all t’s because this may not apply blanketly in all jurisdictions.
3 It will give you an opportunity to save your home
Successfully filing for bankruptcy not only helps you save your home but other important assets such as your car, retirement savings as well as other household commodities. This is because once you are declared bankrupt and your debts are cleared, the court order will include barring your creditors from claiming such personal property.
It’s noteworthy however that there are usually some exceptions to these bankruptcy rules across different jurisdictions therefore it’s a good idea to have a very competent legal team handling your bankruptcy case so that you can get to enjoy all these benefits. All in all, be sure not to abuse these benefits because you may end up in worse legal troubles.