5 Things You Could Do To Come Out Of Bankruptcy When You Are Actually Broke
- Blog|Insolvency and Bankruptcy Code|
- 4 Min Read
- By Taxmann
- |
- Last Updated on 12 July, 2022
Latest from Taxmann
When you think of on how to file for bankruptcy when you are broke, you would also have to plan how you will deal with various financial obligations that would come with it. Be it your lawyer’s fee or other financial obligations, if you plan well, you will not feel so much of trauma and pressure while you are going through it.
Here are few tips and tricks to help you on how to file for bankruptcy when you are literally broke-
Fair Debt Collection rules:
Know the Fair Debt Collection rules and practices as advised by law in your region. This will help you know your rights and to help you counter and deal with the aggressive behavior of your creditors while you plan on how to file for bankruptcy. These rules were formulated to regulate the collection agencies and prohibit them from violating the laws so formulated. As per these laws, the collection agency can only contact third party to secure your location. Once you have allocated your legal representation, they cannot contact you directly. They cannot call you before 8 am or after 9 pm. They cannot call you during your office hours. They cannot discuss your debt with any third party unless it is your lawyer, a credit bureau, the creditor himself or the creditor’s attorney. In case you notify them in writing that they must stop calling you or sending letter, then they must stop it by law except for one letter where they will signify you their role of actions. They are not empowered to harass, oppress, abuse, threaten, or use onsite or profane language with you over phone or ring you on your phone repeatedly in order to annoy you. Also, if you report, your creditors violating the fair debt collection laws, then they tend to get penalized for it by law thus further reducing your debt burden.
Take help from freely available legal aid:
While you are figuring out on how to file for bankruptcy while you are broke, don’t forget to take advantage of various free legal aids provisioned by your legal system. There are many bankruptcy consultants who help you with free initial advice on things like whether you should file for bankruptcy or not, what kind of bankruptcy one should file for, how much time and money it would take, and how you can pay for it.
Let your creditors pay for your bankruptcy:
One way to save money when you think of on how to file for bankruptcy when you are broke for your bankruptcy procedure is to stop paying debts with your unsecured creditors. Yes, identify your creditors and seek for one which does not hold any kind of security against the debts that you own them. Like your credit cards, often they do not have any kind of collateral signed off by you. This money can be secured and saved to pay off your debts with other form of creditors.
Look for help from your friends and family:
When you think of on how to file for bankruptcy when you are broke, you can look for other kind of help from like your family and friends. Often, we tend to overlook such help, but this is really a very helpful resource to secure money to help you overcome your situation. Obviously, you don’t have to sign up for any kind of collateral or contract to pay it back. However, there is a catch here, you need to disclose the source of such sums with your lawyers like if it a gift or a loan. This will be listed as your income or another set of creditors in the list while filing for bankruptcy.
Modify your routines a bit:
When you think of on how to file for bankruptcy when you are broke, also try to reduce your day to day expenses like rather than having your dinner out in a fancy restaurant while you are about broke, you can help yourself by cooking food at home. This little sum adds up a lot at the end. Cut don’t on your luxuries a bit and you can add up that sum to pay off your debts over time. Planning is the key to come out of bankruptcy situation. You mismanaged finances have led you this way and now only managing them the right way will pull you out of it.
Related Articles:
Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.
Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.
The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:
- The statutory material is obtained only from the authorized and reliable sources
- All the latest developments in the judicial and legislative fields are covered
- Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
- Every content published by Taxmann is complete, accurate and lucid
- All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
- The golden rules of grammar, style and consistency are thoroughly followed
- Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied
Sign Up
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Latest Books
Everything on Tax and Corporate Laws of India
To subscribe to our weekly newsletter please log in/register on Taxmann.com
Comments are closed.