Bankruptcy
Bankruptcy is a legal term and it basically states that an individual is unable to pay off their debts and is handing the matter over to the court system so that they are able to take over the individuals finances for this purpose. When an individual files for bankruptcy, there is usually an appointed court trustee who will evaluate the claim and ultimately be the decision maker on how much of your income will go to repay these debts and whether or not they will be garnished out of your paycheck. So if you need help with Bankruptcy or just want to find out more about Debt and Bankruptcy...
This is the state of being unable to pay for what one owes or lacking completely in anything that has value. It is not just individuals that go bankrupt, organizations also go bankrupt and some Government can also go bankrupt, that is why you hear of Bankrupt Economy. Bankruptcy can be avoided and should be avoided.
However, the question is how many individuals or organizations know what to do in other to avoid bankruptcy? There are different types of bankruptcy, but for the purpose of this write-up, I shall only consider one type of bankruptcy---FINANCIAL BANKRUPTCY, as it applies to individuals .
However, the question is how many individuals or organizations know what to do in other to avoid bankruptcy? There are different types of bankruptcy, but for the purpose of this write-up, I shall only consider one type of bankruptcy---FINANCIAL BANKRUPTCY, as it applies to individuals .
Personal Financial Bankruptcy
This refer to individual who are financially bankrupt. Let me begin by asking you these questions, If you have One Million Dollar ( $1,000,000.) today, how will you handle it? What will be your priorities? You will agree with me that one way or the other, we all come across money in our day to day activities, but some how, some of us don't know how we spend the money. The biggest problem about money is not how to get it but how to handle it. Now, I want you to answer this question, All that you have in your home now, is there anything you wished you would not have gotten?
Reasons for Personal Financial Bankruptcy
Mis-Management
Before I let you know what Mis-management is, it is better you know what Management means. From the English dictionary, it means the act or skill of dealing with people or situation in a SUCCESSFUL way. From the above definition, we can say that mis-management is dealing with people or situation in an unsuccessful way.
Better put as to deal with something badly. When it comes to finance, alot of people are guilty of mis-management. Most people do not know the act or skill involve in the managing money. For you to overcome financial mis-management, you need to have an understanding of the other reasons people go into bankruptcy
Better put as to deal with something badly. When it comes to finance, alot of people are guilty of mis-management. Most people do not know the act or skill involve in the managing money. For you to overcome financial mis-management, you need to have an understanding of the other reasons people go into bankruptcy
Mis-placed Priorities
A priority is something that is more important than any other things and as such are dealt with first. By mis-placed priority, I mean priority that is out of place, i.e. instead of dealing with the most important things first, you deal with them last. In other word, instead of spending your finance on things of high priorities, you spend it
on those of low priorities. Mis-placed priority is as a result of people trying to live a false life. A false life is a life that is inimical to what they see on the television, which in the real sense, is out of their reach.
on those of low priorities. Mis-placed priority is as a result of people trying to live a false life. A false life is a life that is inimical to what they see on the television, which in the real sense, is out of their reach.
Acquisition of an Inappropriate Liability
Liabilities are things that do not yield you any financial profit. It could also be said to be things that have no financial values in terms of debt payment. Liability gives temporal happiness and a permanent pain or regrets.Having understood what liabilities are, it would be out of place not to mention that in life, we all have to acquire some liabilities. However, what am saying here is that, since it is imperative for us to have liabilities, we should have the appropriate one i.e. We should endeavour to have the ones we can't do without, rather than going for everyone that appeal to us. Here is a question for you: If you have a few Millions of dollars come your way, what liabilities would you acquire? Would you go for an expensive vacation in the Caribbean islands?
The Solution for Personal Financial Bankruptcy
There is no problem without solution. Before I let you into the solution, we need to do some self evaluation and self test. You have to answer these questions first, Do you spend above your income? Have you ever had any regret for acquiring something? Alright, here is the self evaluation; take your pen and write these words down , "INCOME & EXPENDITURE". On the INCOME column, put down all your source of income and against each source of income, put down the exact amount of money you receive from that source on a day to day or monthly basis.
Example.
If you are on a salary of $100 per day, then for 30 days you will earn $3000. Or, if you are on per hour then multiply that amount you earn per hour by the numbers of hours you work in a day , and multiply the result by the number of days you work in a month. E.g. if you earn $50 for one hour and you work for eight ( 8 ) hours in a day, then you have $400. a day and if in a month, you work for twenty( 20 ) days, then you earn $8000. in a month.
That been done, put down all other source of income you may have and at the end, sum them together to have your total income. On the EXPENDITURE column, put down all your expenditure for the month in monetary terms. For example, if Rent is part of your expenditure, then against rent , you will put down what you pay as your monthly rent.
Example.
If you are on a salary of $100 per day, then for 30 days you will earn $3000. Or, if you are on per hour then multiply that amount you earn per hour by the numbers of hours you work in a day , and multiply the result by the number of days you work in a month. E.g. if you earn $50 for one hour and you work for eight ( 8 ) hours in a day, then you have $400. a day and if in a month, you work for twenty( 20 ) days, then you earn $8000. in a month.
That been done, put down all other source of income you may have and at the end, sum them together to have your total income. On the EXPENDITURE column, put down all your expenditure for the month in monetary terms. For example, if Rent is part of your expenditure, then against rent , you will put down what you pay as your monthly rent.
At the end, sum up all your expenditure to have your total expenditure. Now, compare your total income with your total expenditure, what do you notice? Is your total income greater than your total expenditures? Or is your total income equal to your total expenditures? Or is it less than your total expenditures?
If your total income is greater than your total expenditures, it shows that you are above bankruptcy, but the degree to which you are above it depends on the percentage to which your total income is compare to your total expenditure. For instance, if your total income is 10% higher than your total expenditure, it means you are 10% above bankruptcy, which is not a fair grade against bankruptcy. On the other hand, if the percentage is above 60% it means you are secured fairly enough against bankruptcy. However, if your total income equal
your total expenditure, it means you are on a dangerous path and you could fall anytime into bankruptcy.
Moreover, if your total income is less than your expenditure, it goes to show that you are '' already bankrupt''.
Therefore, you need an urgent and calculated move in other to come out of that state.
If your total income is greater than your total expenditures, it shows that you are above bankruptcy, but the degree to which you are above it depends on the percentage to which your total income is compare to your total expenditure. For instance, if your total income is 10% higher than your total expenditure, it means you are 10% above bankruptcy, which is not a fair grade against bankruptcy. On the other hand, if the percentage is above 60% it means you are secured fairly enough against bankruptcy. However, if your total income equal
your total expenditure, it means you are on a dangerous path and you could fall anytime into bankruptcy.
Moreover, if your total income is less than your expenditure, it goes to show that you are '' already bankrupt''.
Therefore, you need an urgent and calculated move in other to come out of that state.
Bankruptcy
There are two basic types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7 Bankruptcy and Chapter 13 are legal proceedings that are available to a person to cope with a financial crisis. Personal bankruptcy must be filed in a federal bankruptcy court. You will have to pay about $160.00 in court fees. Attorney fees are additional
Chapter 7 bankruptcy involves the liquidation of all your assets that are not exempt from the bankruptcy settlement. Exempt property may include automobiles, some household furnishings, and property needed for work-related use; for example if you were a mechanic the tools you use to perform your work would be exempt from the bankruptcy settlement. Exemption amounts vary from state to state.
Under this plan the court appoints a trustee to handle the liquidation of your non-exempt property. The trustee can sell or turn over your property to your creditors. The court discharges your debts and you are now debt-free. You are allowed by law to file a Chapter 7 bankruptcy once every six years.
This type of bankruptcy is basically liquidation where the debtor hands over all assets so they may be sold and the resulting cash may pay off the creditors. Once this occurs then all the debts that are dischargeable will be discharged in a time frame of about four months. Most people who file chapter 7 bankruptcy do so when they don’t have any assets to speak of so there really is nothing to sell off or lose and there is a fast start to a new life with no debts.
The reason bankruptcy lawyers work with people to file Chapter 7 bankruptcy is to help people get out from under the burden of their debts. Fortunately, if you are in debt so far over your head that you can’t handle the stress anymore then consider consulting Phoenix bankruptcy lawyers to help you get out of the mess. Once you contact a lawyer they will be able to walk you through the process of filing for bankruptcy and eliminating your debts almost immediately. There are several reasons why people file for bankruptcy and they include large expenses that are completely unexpected that place an unusual burden on the individual as well as overextended credit, marital problems like divorce, as well as unemployment and medical expenses that are too much to pay.
A study conducted by Harvard showed that at least half if not more of US bankruptcies were a direct result of medical bills. This may happen to you because nobody knows what the future holds and accidents happen every day. So, don’t worry too much if you have to file bankruptcy because you will eventually be able to rebuild your credit.
Many banks are now responding to the many Americans who have filed bankruptcy and helping them rebuild their credit. Secured credit cards are simply credit cards that are secured by an amount of money as a guarantee. So, if you paid a security of $200 then your credit would be $200. As you prove your ability to pay then your credit is increased slowly but surely and your credit score increases over time. Amazingly, two years after a bankruptcy has been discharged debtors are frequently given mortgage loans that have equally good terms as others in the same financial situation who have never filed bankruptcy
Under this plan the court appoints a trustee to handle the liquidation of your non-exempt property. The trustee can sell or turn over your property to your creditors. The court discharges your debts and you are now debt-free. You are allowed by law to file a Chapter 7 bankruptcy once every six years.
This type of bankruptcy is basically liquidation where the debtor hands over all assets so they may be sold and the resulting cash may pay off the creditors. Once this occurs then all the debts that are dischargeable will be discharged in a time frame of about four months. Most people who file chapter 7 bankruptcy do so when they don’t have any assets to speak of so there really is nothing to sell off or lose and there is a fast start to a new life with no debts.
The reason bankruptcy lawyers work with people to file Chapter 7 bankruptcy is to help people get out from under the burden of their debts. Fortunately, if you are in debt so far over your head that you can’t handle the stress anymore then consider consulting Phoenix bankruptcy lawyers to help you get out of the mess. Once you contact a lawyer they will be able to walk you through the process of filing for bankruptcy and eliminating your debts almost immediately. There are several reasons why people file for bankruptcy and they include large expenses that are completely unexpected that place an unusual burden on the individual as well as overextended credit, marital problems like divorce, as well as unemployment and medical expenses that are too much to pay.
A study conducted by Harvard showed that at least half if not more of US bankruptcies were a direct result of medical bills. This may happen to you because nobody knows what the future holds and accidents happen every day. So, don’t worry too much if you have to file bankruptcy because you will eventually be able to rebuild your credit.
Many banks are now responding to the many Americans who have filed bankruptcy and helping them rebuild their credit. Secured credit cards are simply credit cards that are secured by an amount of money as a guarantee. So, if you paid a security of $200 then your credit would be $200. As you prove your ability to pay then your credit is increased slowly but surely and your credit score increases over time. Amazingly, two years after a bankruptcy has been discharged debtors are frequently given mortgage loans that have equally good terms as others in the same financial situation who have never filed bankruptcy
A Chapter 13 bankruptcy allows you to keep property, like a mortgaged house (provided there are no liens on it) or a car, as long as you have a steady income. A Chapter 13 bankruptcy is a court-ordered and approved repayment plan to your creditors. This plan allows you to use your future income to pay back your debts over a 3-to-5 year period without surrendering any property. Once you complete payments under the plan, your debts are discharged by the court.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both provide exemptions that allow people to keep certain assets, although exemption amounts vary. A bankruptcy will not erase most child support, alimony, fines, taxes and some types of student loans.
Financial experts agree that a bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. A bankruptcy remains on your credit report for a period of 10 years, making it more difficult to obtain credit in the future. You should also know that although your bankruptcy disappears from your credit report after 10 years, you may still be asked by future employers or lenders if you have “ever” filed for bankruptcy.
Both types of bankruptcy may get rid of unsecured debts and stop foreclosures, repossessions, garnishments, utility shut-offs, and debt collection activities. Both provide exemptions that allow people to keep certain assets, although exemption amounts vary. A bankruptcy will not erase most child support, alimony, fines, taxes and some types of student loans.
Financial experts agree that a bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. A bankruptcy remains on your credit report for a period of 10 years, making it more difficult to obtain credit in the future. You should also know that although your bankruptcy disappears from your credit report after 10 years, you may still be asked by future employers or lenders if you have “ever” filed for bankruptcy.
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