Just because you think you can't pay your debts doesn't mean you really can't pay them and should file for bankruptcy. Bankruptcy gives you a way out of a financial quagmire; it does have its disadvantages. For example, it remains on your credit record for many years. Therefore, it's advisable to analyze your situation carefully and only file for bankruptcy if it is the last resort. Here are three strategies to analyze your financial situation:
Inventory Your Assets
The first thing is to take stock of all your assets, and put a dollar value on them. Assets such as bank accounts and stocks are easy to evaluate, so you need to put down their exact figures. For other assets, an educated approximation will suffice. If you are expecting a sizable money or valuable asset in the immediate future, include it in the inventory too. After that sum up the values of all the assets so that you can know what you are worth.
Add Up Your Liabilities
Just like with the assets, you need to list and sum up all your liabilities. This includes mortgages, credit card bills, outstanding car payments, college loan, and even rent due, among others. Don't forget to include interests on these loans, penalties, and any late payment fees the creditors may charge you because they inflate your debts.
Compare the Figures
Once you have the two figures, compare their amounts to see which one is bigger. If your assets are more valuable than your debts, then you may get out of your sticky situation with a little reorganization of your finances. This is also true if the amount of debt you owe is equal to or slightly bigger than the assets. However, bankruptcy may be the only way out for you if your debts are way higher than your assets.
Evaluate the Alternatives
Bankruptcy may be a way out if you have more debts than assets, but it may not be the only way out. There are alternative ways of managing alternative debts; evaluate these alternatives and only opt for bankruptcy if it is the best or only way out. Here are some of the alternatives to consider:
Going through this process without professional help is not easy. This is especially true if you have limited legal and financial knowledge. A bankruptcy attorney like Greg Dunn Bankruptcy Attorney, who has handled similar processes in the past, can help you know whether you really need bankruptcy to reorganize your finances.Share
14 March 2016
When I was a child, I regularly visited a local department store. At this lovely business establishment, one could purchase many items including clothing, shoes, and even hotdogs. Sadly, due to competition and other factors, the store closed its doors for the last time several years ago. If the owners of the store had considered bankruptcy options, they might still be meeting customers’ needs today. On this blog, you will learn how to resurrect your business with available bankruptcy alternatives. Regardless of whether you choose to liquidate your assets or reorganize your entity, the opportunity to remain in operation might be an option for you.