Businesses always have a chance to fail. Reasons can range from bad luck to big mistakes. The result is the same though, with the business closing down. The problem is that businesses often have debts that need payment even after a business closes down. If you do not have the fund to pay for these debts, you will have to pay for bankruptcy.
it’s not as simple as that though. There are several types of bankruptcies and you will need to choose among them. The most common pick is to go for a Chapter 7 bankruptcy where debts are paid through non-monetary assets and property. But for businessmen with a steady stream of income, Chapter 13 bankruptcy is the better option.
It will restructure your finances so that you go through three to five years of payments before you clear your debt. It isn’t easy though which is why you’ll need the following tips to come out of it okay.
Always Consult a Lawyer
If there is anything that you need to do when it comes to filing Chapter 13 bankruptcy is to get a good lawyer. It should be easy to find a reputable business attorney in Salt Lake City and other urban areas. The main thing they will help you with is all the paperwork that filing for bankruptcy entails. These filing can reach 50 or more pages.
Your lawyer and their staff will help write the papers and ensure that they are as correct and honest as possible. Any mistake can lead to problems in the future so having a lawyer looking over your shoulder can save you money in the long run.
Have a Budget Ready and Stick With It
Remember that it will take up to 60 months before you are free of your bankruptcy payments. That means you need to have a budget for payments and your expenses every month. Five years of limited spending can be a big burden but it is possible. You have to discipline yourself and stick to your budget. There will be many temptations out there but remember to stick to the plan and you will be fine.
Keep Up the Payments
It sounds obvious to keep up with the payment, but a surprising amount of people fail their Chapter 13 bankruptcies because they miss out on payments. You do not want that to happen since you’ll end up paying penalties and additional fees. In addition, negotiating again will take further time. If possible, try to get additional sources of income to add to your payment power.
Stay in Contact With the Process
Chapter 13 bankruptcies are ongoing processes and many things can change during it. This is why you need to stay in touch with your Chapter 13 trustees and your attorney. It is a good policy to save every document in the process like trustee reports and proof of claims so that you have the paperwork to show as proof of your consistent payment.
Filing for bankruptcy sounds bad, but it is not the end of the world. Millionaires have come back from bankruptcy and thrived. You only have to be smart about it. The tips above can help with that. Remember them and have discipline with your spending habits. That is the best way to get out of bankruptcy in no time.