Is Bankruptcy the Right Thing For You?

Bankruptcy is a financial practice that usually allows you to officially declare that you cannot repay your debts now and do not see how it will ever be possible in the coming future. Declaring Bankruptcy is also usually a very big step. For many people, there are other ways for you to get out of debt, such as debt consolidation or negotiating with your lenders. Nevertheless, if your best option for getting out of debt is bankruptcy, than you should take steps in order to make this financial situation work in the best possible way for you. A financial profession can assist you in doing that. In any case, before you decide to jump into anything, you will need to fully decide if bankruptcy is right for you.

Firstly, it is always very important to learn as much as you can about bankruptcy. For individuals, chapter 7 and chapter 13 are the two types of bankruptcy that can be filed. There are many other options for businesses and entities. You can learn the difference between the two so that you can see how they work. If bankruptcy is right for you, you must be aware of your obligations and all of your lenders’ choices.

Once you have learned all that you can about bankruptcy, you should try to take a moment in order to consider other options. For instance, you will be able to consolidate your debts into one large monthly payment. If you are considering bankruptcy because you just barely miss paying off your bills one time every month or if you feel overwhelmed by credit card debt, this may be a great option for you. You can also try doing nothing and living simply for a number of years, which will work very well if you have no family for whom you are responsible. Another option can be found in negotiating with your lenders. In the end, there are several different options other than bankruptcy, so always try to make sure that your second step is to consider them all.

Next step is to try to check out what the requirements are for eligibility and for declaring bankruptcy. If your debts are too high and your income is too low, you probably will not qualify for chapter 13 bankruptcy. On the other hand, if your income is too high and your debts are too low, you will probably not qualify for chapter 7 bankruptcy. In several cases, you might not qualify for either, and this is a sign that you did not think through your other choices.

Try to consider all of your property and debts if you do qualify. What will happen to your home? Your car? Your retirement plan? Every state has a different specification when it comes to this, so try to make sure that you understand how your property will or will not be taken. Further, it is always important to begin compiling lists of your assets and debts. Try to remember that some debts cannot be wiped out, such as child support payments.

Once you have all your information compiled, you can begin the declaration process. It is always best to work with a lawyer or financial professional in order to complete this task, and remember to always be completely honest. Declaring bankruptcy is not always for everyone, but it can possibly work for some people.


Gemma Markby is a contributing editor at This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.

Avoiding the Pitfalls of Spending

With all the benefits which are evident from personal budgeting, it is no wonder that an increasing amount of people are relying on them to reduce debts and increase their savings. Nevertheless, all ‘budgeters’ need to be very careful to avoid some common pitfalls that tend to appear at times.

Credit cards might seem like small insignificant pieces of plastic, but they can cause a great deal of trouble for the owners. It is very common for people to make some unwise purchases, which they would have avoided otherwise, because they just happened to have the credit card in their wallet.  The best solution for many people is simply to get rid of credit cards and begin paying only by cash, check, or debit cards.  You might want to keep one card handy for emergencies, but it is probably always best to keep it out of reach, and well away from your wallet.

Another budgeting problem is impatience. There are financial goals which are set, but people don’t always have the patience to complete a savings program.  For example, an individual might begin to set aside some money for a new car; nevertheless, after a few months they might happen to discover the car of their dreams. So, rather than waiting, they will just go ahead and make the purchase. This could consequently cause some serious financial strains on your budget. Discipline is an absolute must in order to prevent impatience or temptation from breaking your budget.

Once a person or a family makes a budget, they will often fail to adjust it when necessary.  A budget is created using a set of expenses and income figures which are liable to change.  As these figures do change, it is important that the budget changes in order to reflect the adjustments. There could be some major deficits if this is not done in an appropriate and prompt manner.

Obviously, nobody forgets about Christmas and New Year celebrations, however many people don’t remember to take into consideration the idea of budgeting for holidays when creating a budget. Therefore, adequate funds will not have been set aside for presents, food, parties, etc.  These items should always be factored in and saved for throughout the year.

Finally, many people factor in transportation and accommodations for vacations in their budget, but they also sometimes underestimate money needed for food, entertainment, and just plain spending money.  Try to bear in mind that all the resorts and tourists areas are double or triple what you would normally pay.

So, with a little bit of planning, you’ll be on your way to saving more money than you ever thought was possible in the past!


Gemma Markby is a contributing editor at This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.