How to file for bankruptcy

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How to file for bankruptcy
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What is bankruptcy?

• An individual filing for bankruptcy legally
  declares that he is not in a position to service
  his debt obligations. The status of being
  'bankrupt' relieves debtors from the legal
  obligation of debt payment to creditors.
• Steps to file for bankruptcy as an individual

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1. Prepare your balance sheet

• Bankruptcy is a legally-acquired status and you
  will have to prove it in court.
• Court decisions are based on evidence and in this
  case evidence will be in the form of the assets
  and liabilities you hold.

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2. Consult a legal advisor

• Talk to an expert advisor on this matter. Your
  advisor will study your balance sheet and explore
  the possibility of winning the court case.
• The advisor will provide an insight on individual
  filing or joint filing in case you are married.

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3. File a lawsuit for bankrupt status

• Ask your lawyer to file a petition under the
  Provincial Insolvency Act and fight the case in
  court.
• Once you win the case, you will be deemed
  bankrupt and will be relieved from continuous
  hounding of creditors.

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Advantages of filing for bankruptcy

• Getting bankrupt is in no way a desirable state,
  but it is not the end of the road either.
• You may lose your self-confidence and sense of
  direction, but you can make a comeback with
  careful planning.

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Disadvantages of filing for bankruptcy

• Financial distress caused by bankruptcy can
  disrupt your plans - both for the present and the
  future.
• All your assets are lost All your assets are
  liquidated in case of bankruptcy. The amount
  obtained is simply drained out in settling
  creditors' claims. You are left empty-handed
  which makes a restart highly difficult.

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How to avoid bankruptcy?

• Consult a financial advisor Financial advisor
  can help you manage your situation better. An
  advisor can not only identify hidden sources of
  fund but can also help in disposing of some
  liabilities.
• Negotiate with your creditor If you feel that
  buying little time might improve your situation a
  bit, negotiate with your creditor.

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