What Really Happens When You File For Bankruptcy?

 

JUDITH OHIKUARE | Refinery29

When many people hear the word “bankruptcy,” they usually think of Chapter 11 bankruptcy, which businesses file. That process involves financial restructuring and “reorganizing” until the company is, ideally, on more solid footing and able to pay its debtors.

By contrast, filing for personal bankruptcy is a different matter. On the absolute, most basic level, people file for bankruptcy when their debts far exceed their liquid assets. That might happen as a result of being unemployed, having incurred massive medical debt or taken on a lot of consumer debt, or in the aftermath of marital and/or custodial issues.

Corporate Assimilation, moneyAn individual may voluntarily file for bankruptcy in court, but getting approved isn’t a simple matter. (As evidenced recently when 50 Cent, who was recently discharged from bankruptcy, was forced to clarify whether he actually owned $8 million in bitcoin.)

Going bankrupt might seem like an extreme but attractive way to wipe your financial slate clean, but it’s not a decision to take lightly. Here’s how it works.

When Should I File For Bankruptcy?

The Balance has a comprehensive checklist of the level of need you need to exhibit before you might successfully be approved to file for bankruptcy. (Unless a creditor or agency petitions a court to impose bankruptcy on you.)

Full article at Refinery29

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