Bankruptcy should be the last option to consider if you can not meet your financial obligations. This is an important decision with serious consequences.

When a person goes bankrupt, its assets, except some that are exempted by law, are given to a trustee. The latter sells and distributes the money from the sale to creditors of the person.

Implications of bankruptcy:

• Some debts will be canceled immediately, such as those related to credit cards.

• Other debts will be maintained as the child support, taxes, etc..

• Borrow could cost you more.

• Bankruptcy can stay for a few years in your credit file.

Warning Signs of Bankruptcy

How do I know if you head straight for bankruptcy?

• You do not have a budget.

• You have no control over your spending.

• You do not have a buffer (an emergency fund).

• You bought a house that you can not afford to pay.

• You bought a car that you can not afford to pay.

• You use credit cards indiscriminately.

If you recognize yourself in these signs, it is high time to turn things around.