As it stands, filing for bankruptcy should
be the last resort when it comes to straightening out the finances, whether
they are personal or tied to a business here in Ottawa. The main reason is the
outcome of any type of bankruptcy is always going to be negative. The impact on
an individual is, life changing, and catastrophic in a financial sense.
However, there are instances when it may be
absolutely necessary to go forward with filing for bankruptcy. The important
factor is understanding when the time is right. The following items need
consideration beforehand, however:
·
Are you receiving harassing
calls from Ottawa collectors?
·
Do you shop for necessary items
using your credit card?
·
Have you been making minimum
payments on the same credit cards?
·
Do you have the feeling that
your finances are out of your control?
·
Do you have any idea of the
amount of your debt?
·
Lastly, have you made any
attempt at consolidating your debt?
Considering all of these points, it is
definitely time to access your financial situation if any one of the above
points is occurring. Another point is that you understand what being bankrupt
means. Accordingly, it means that a person or an Ottawa business owes more than
they earn.
This drives the interest on loans higher
and the person or business deeper in debt. A tool that is predominately used
for business finances also works for individual or personal finance as well.
This is the debt ratio.
This
determines the financial health and leverage that is present, (the ability or
inability to acquire a loan and pay it back). While the results of the formula
may be clouded by operational costs in any scenario the higher the ratio the
lower the financial health is. The way to find it is to divide the total amount
of liabilities, (money owed), by the total amount of assets, (money earned).
An example follows;
Joanne earns $3000 per month and pays monthly for the following,
$400 for car payment, $1200 for rent and
utilities, $200 for groceries, $300 car insurance,
$200 for renters insurance. The total liability is $2300 divided by $3000
equals a ratio of over 75%. If she were living by using her credit cards for
daily expenses you can see the dilemma mounting rapidly.
This is why it is a good idea to always be
aware of your cash flow and your debt. When considering filing for bankruptcy
in Ottawa you should look at the outcome, such as bad credit, the biggest
deterrent. Naturally, there are two different ways a bankruptcy will occur, the
first is to file after deciding it is the best move and the second way is for
your creditors to declare it for you. This is typically the worst of either
case because of who made the accusation. Moreover, if you determine that
bankruptcy is a best case scenario you
should talk to an Ottawa bankruptcy lawyer so they can help guide you through
the process.
Need help with Bankruptcy? Surgeson Carson Associates is a renowned Ottawa Bankruptcy Trustee who can provide you better suggestions to get out of your financial problems. There might be other solution than Bankruptcy.
