How to Go Bankrupt

When times are tough, it is easy to ask how to go bankrupt. When people know how to go bankrupt and know how easy it is to do, it is very tempting to just fill out the paperwork and file bankruptcy. But it is important to know that even if you know how to go bankrupt and know that it is easy, think about the long term effect of what it will do to your life, your family and your business.

Learning how to go bankrupt

To go bankrupt, you first have to get yourself in bad financial situations. You can be in foreclosure, have too much debts, too many medical bills, run a failing business, and so on. The bottom line is that you owe too much, have too many creditors and cannot pay them back. When this happens, you can seek the help of the bankruptcy court and go bankrupt. To officially go bankrupt means to file bankruptcy and the bankruptcy court declares you bankrupt. You can choose from a few types of bankruptcy to file.

For most people, chapter 7 bankruptcy and chapter 13 bankruptcy are the most common. For businesses, chapter 11 bankruptcy is also common.

Going bankrupt is the last resort

Before the bankruptcy court declares you legally and officially bankrupt, you have to start the process by filing a bankruptcy petition. Depending on what type of bankruptcy you are filing you will need to comply with specific bankruptcy laws.

Filing bankruptcy is not free. You will need to pay the bankruptcy court filing fee as well as other administrative fees. The process of how to go bankrupt is different for chapter 7 bankruptcy and chapter 13 bankruptcy.

There will also be a hearing where creditors will question you. The trustee of the bankruptcy case will liquidate your assets according to the bankruptcy laws and the pay the creditors. Some debts are discharged while others are not.