A Brief Introduction To Claiming Bankruptcy - Personal Finance

• Written by Alex Garza
• Posted May 22, 2011 at 1:08 pm

The term bankruptcy dates back to Renaissance era Italy. It was at the time of the Medici family when merchants would sell their wares on their tables. When someone was bankrupt at that time their table would be broken, which is where the phrase to break the bank comes from. Fortunately in modern times claiming bankruptcy is not quite as dramatic!

Other people believe the opposite. They may think that they can accrue a lot of debt and then file for bankruptcy, believing that this will wipe out their debts without consequence. This is also not true as purchases will be reviewed in a claim and this can effectively amount to fraud. This is why it is important to get the right advice before you make the claim.

Another more dangerous attitude is the idea that you can run up a lot of debts on credit cards and so forth and that bankruptcy will effectively eliminate all your debts. As well as being an irresponsible attitude this is also not true. Anyone looking at a bankruptcy hearing will look at your purchases and decide whether they were necessary or frivolous.

What you have to pay depends on the type of bankruptcy that you file for. It may mean paying off a certain amount over a period of between three to five years. Another form may involve liquidating the assets of a debtor. A judgement will usually be made based on what is appropriate for all parties concerned.

One thing to be wary of is that bankruptcy can have a big effect on your credit rating. The claim will be on your records for at least ten years. During this time it is still possible to credit although it is likely you will be charged a higher rate of interest for it.

While it can have an effect on your credit rating over time it is possible to restore your rating as your financial situation improves. A lot of high profile people have been through this process and have often come out very rich and successful. While it is not something that should be taken lightly, it is a valid option and one that a good legal representative should give you the right advice on.

In short when claiming bankruptcy it is vital to get the right advice and explore what options are relevant to your needs. If handled in the right way you can continue to live your life and indeed quite a few prominent people have been declared bankrupt at some point. Talk to your local independent financial adviser to discuss your financial situation and what action is appropriate to your circumstances.

Want to know more about this? Click here: debt settlement

Incoming search terms for the article:

Source: http://bankruptcy.financenewstoday.com/a-brief-introduction-to-claiming-bankruptcy/

asdf dannii minogue les paul madhuri dixit achilles psn up cloverfield