Avoiding Bankruptcy Or How Can I Avoid Bankruptcy?

I am not a debt councillor just a reasonable, fair minded and mature individual who has had more than his own share of financial problems.

No normal individual wants to declare themselves bankrupt but sometimes 'clearing the decks' does enable individuals to channel their efforts and thoughts back into positive ways rather than feel fear and spend time creating a defence of a situation that appears untenable.  
 
Equally gaining advice and assistance may help you re-focus and actually see that there is a way to avoid declaring bankruptcy and avoid you becoming a bankrupt and having to take on board the consequences of bankruptcy for the next year or so.

Becoming bankrupt is the sort of event that can destroy marriages, impact or lose your job and generally just take you to the very end of your own ability to think straight. At a corporate level lots of people can get hurt.

What is Bankruptcy?

I am not legally trained but will give a simplistic view of the meaning of bankruptcy. Before you can take steps to avoid bankruptcy then you perhaps need to understand the circumstances under which it may occur. The term itself can applied to the individual and would be referred to as personal bankruptcy or to an organisation or company and maybe referred to as business bankruptcy or corporate bankruptcy. The laws or rules associated with any type of bankruptcy vary enormously in different countries of the world and across the states. This last statement is especially true in the U.S.

If a company or individual is unable to pay their current bills or costs then it has a cash flow problem. If for example the costs of running your home or business are $5,000 per month and the income for the same period is $4,000 then you are unable to pay all your creditors (that is the people to who you owe money). If you have a cash flow problem but have some type of asset then you are generally a far cry away from bankruptcy. You may for example have a debtor (someone that owes you money) that you are having trouble collecting from. Whatever the case you probably need help to restructure what you have such that you are able to generate either more cash for today or reduce the outgoing expenditure such that your income covers the rescheduled expenditure.

It all sounds simple doesn’t it, especially when it happens to someone else. Sometimes stating the obvious seems a little pointless but frequently when trouble surrounds an individual or company the so called obvious just can’t be seen and an outsider making the statement is exactly what is required. For example not all bills are the same even if they are due now. Bills for goods or services that you have used are obviously a little different than bills for goods or services that you anticipate using. In plain English it could be relevant to try and cancel commitments you may have made to future payments than to argue with suppliers who have already provided their goods or services. Another substantial cost maybe a mortgage which although due represents a part payment over several years and there maybe scope to reschedule.

If you have assets then again you maybe able to borrow against you asset or sell some or your entire asset to generate cash.

Whatever your status the odds are if you have thought about personal or corporate bankruptcy then you probably need some outside help. Just having another pair of eyes look at a problem can help. If you are to seek help then you would be required to list your income and expenditure and your debts and commitments. To do this take a piece of paper or spreadsheet and just start making a list of all your current expenditure and anticipated expenditure and then do the same for your income then go over it again. You maybe then can go over the figures and break down into smaller categories. Take your last few months’ bank statements and check that you have itemised everything in your statements.

Now you are in a position to get some proper help whether be about personal bankruptcy or a corporate matter. Do not allow yourself to be pushed or intimidated because if you’ve got this far you may well be over the worst.

By: peterhw

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Personal bankruptcy or corporate bankruptcy create very difficult times for all and just having someone else take a look maybe just the help you need.  The getfunded website provides further help, resources and links.