Posts

File Bankruptcy - Complete Controller

Bankruptcy is a last resort remedy for those who are so financially devastated; they cannot recover any other way. Many people hear the word bankruptcy and think of it as an irreversible and adverse remedy. While a setback, the truth is that bankruptcy can be a relief to those who have been struggling against financial losses or burdens. Here is everything you need to know about bankruptcy. Check out America's Best Bookkeepers

Bankruptcy Is Not a Quick Process

Leading into going into court to present your bankruptcy case, there is a lot of preparation. Once it gets to the courtroom, the process does not get any faster. Small claims court cases are usually only a day, while bankruptcy can take upwards of six months for chapter seven bankruptcy, which is the most common chapter for individuals. For the other most popular chapters, thirteen and eleven, it can take up to five years.

Bankruptcy Opens Your Finances to Public Scrutiny

While everyone involved will certainly attempt to preserve your dignity through the proceedings, they are all public and will only be held privately in extenuating circumstances. Because this is a public proceeding, you need to be prepared that your friends and family may become aware of your financial situation and learn the intricate details. These details include assets, expenses, income, debts, and recent financial transactions. And in most cases, you are required to attend a meeting with creditors, which is held in a public courtroom while your creditors can question you. Check out America's Best Bookkeepers

Complete Disclosure Is Required

One of the most required things by the court to consider relieving you of debt is that you are transparent, honest, and offer complete disclosure. This means you cannot leave out an asset, debt, or access to creditors. If it has been discovered that you have withheld any pertinent information to your case, not only can you lose your bankruptcy case, but depending on what you withheld, there could be an investigation opened against you by the FBI. Bankruptcy fraud is a federal crime with considerable fines and possible jail time.

Bankruptcy Forms Are Complicated

Because bankruptcy is a detailed scrutiny of your financial situation, the forms can be as complicated if not more complicated than tax forms. Filing bankruptcy requires you to answer substantial questions and make sure that you thoroughly include every detail. Because this is so complicated, you must hire a bankruptcy attorney. Hiring a professional will help you avoid mistakes that could cost you money, assets, or freedom.

The Bankruptcy Discharge Protects Only You

When considering filing bankruptcy, you must keep in mind that this only covers you and your debts. If you have any shared debts with another person, they will not be covered if you get bankruptcy relief. Therefore, if you share any debts such as a home or car loan, it is not wiped out. This means that though you will no longer be responsible for this debt, creditors can still fully collect it from the cosigner. This should be heavily considered before deciding to file bankruptcy. If bankruptcy is your only choice, you should look for ways to protect your cosigner before filing. Check out America's Best Bookkeepers

Filing for Bankruptcy Is Expensive

Bankruptcy can be an expensive endeavor. If you hire an attorney to help you with your case, it will cost you hundreds and possibly thousands of dollars, depending on the attorney. This expense may be a surprise considering most people are filing bankruptcy because they are struggling. Even if you proceed on your own without an attorney, the fees are still fairly substantial. In some cases, those fees can be waived by the court. This possible waiver is completely dependent upon your income, which cannot be greater than 150% of the federal poverty level.

Declaring Bankruptcy Affects Your Credit for Years

Most creditors will not extend any credit for someone with a bankruptcy on their credit history. Bankruptcy doesn’t mean that you will not receive any credit as some creditors will give you a second chance. However, this is usually a high cost through interest and fees because you are considered high risk. When considering filing bankruptcy understand that while it will help you with your current debt, it will adversely affect your credit score for years to come.

To help counteract the damage bankruptcy does to your credit score, you can build your score on other things. However, this would require that you obtain more credit, which could lead to more debt. You mustn’t incur any debt after you file for bankruptcy. Therefore, if you do obtain credit lines, be sure you pay them in full each time you use it. This can help build your credit and defray the damage that bankruptcy does to it.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
save business from Bankruptcy - Complete Controller

According to the Small Business Association (SBA), the number of bankruptcies in small businesses has increased. While bankruptcy does not necessarily mean closure, it is an indication of monetary distress and a failing business. There’s no real way to know what number of companies may have been saved. However, there is something you can do about your own business to save it from bankruptcy or closure. Check out America's Best Bookkeepers

When a business hits difficult circumstances and can’t recuperate, its administration might need to think about petitioning for bankruptcy, particularly if the business has critical debt. In any case, bankruptcy is considered a last resort, and it bodes well in specific conditions. You first need to survey whether the business is worth saving. You must be sure the business can turn around, and its advantages are worth more than its debts.

Increasing Cash Flow

If cash flow is abundant, you will not have a falling business but a thriving one. That said, it may not be simple to increase cash flow. Without enough cash flow, you’ll likely be overwhelmed to the point that you won’t have the capacity to recognize and address the key causes of the problem. In the initial stages of struggling, you may have the capacity to acquire the cash or persuade investors to venture up. It is more probable that to be effective, you’ll need to exchange some non-core parts of the business or squeeze cash out through more strict management of the balance sheet. Check out America's Best Bookkeepers

Making a Change in Management

A struggling business most likely needs new ideas and new individuals to advance. Every one of us is creatures of propensity to an extent, so for the turnaround to be fruitful, there should be an adjustment in management or the ability to concede that the same old thing won’t work. This can require legitimate and, at times, intense decisions, yet without the right individuals in place, the chances for development and improvement are lower.

Hiring a Consultant

Genuine change can be troublesome when the management team is “me, myself, and I.” Consider procuring a consultant who has practical experience in renewing a failing business. As a beginning stage, Rudnicki suggests the Turnaround Management Association, which affirms specialists in a specific field. An outside expert with a crisp viewpoint can solve a feasible business’ issues without fundamentally requiring the owner to enlist another management team. Check out America's Best Bookkeepers

Considering an Assignment for the Benefit of Creditors

A few businesses experience failure because they fail to serve a purpose for a significant client base, so there’s extremely no motivation to contribute the time and vitality endeavoring to create and actualize a turnaround design. It is better to sell them and proceed onward to a more useful and successful endeavor.  In this case, there are out-of-court options to bankruptcy. Rudnicki focuses on the Assignment for the Benefit of Creditors, or ABC, for instance. ABCs change by state and speak to a liquidation procedure that the American Bar Association says is “organized to save time and cost in finishing up the undertakings of an insolvent business.” It has been vastly observed that experiencing an ABC has been indicated on numerous occasions to be a less expensive and quicker alternative to a bankruptcy filing, bringing about a more significant distribution to creditors.

 

Need assistance in figuring out the best ways to save a business firm from bankruptcy? Reach us and discover how Complete Controller can enable you to augment the best ways to save a business firm from bankruptcy. Visit our www.completecontroller.com for more useful information. Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Bankruptcy Time - Complete Controller

Businesses, especially small and medium enterprises, are sometimes unable to run operations successfully for various reasons. A few reasons cited by leading experts and scholars are related to the owner’s authority and control. Not all start-ups will succeed, but companies with substantial capital and management structure are vulnerable to global turmoil and economic recession as well. Check out America's Best Bookkeepers

If such circumstances arise, then it is prudent to declare bankruptcy in the eyes of debtors, investors, and financial institutions. Bankruptcy is an option when a business overburdened by external debt and financial obligations, is going down the slope and is unable to meet its financial obligations.

Before proceeding, it is vital to understand the business’s organizational structure at the time of establishment. There are generally two categories of business entities. The first is known as an Unlimited Liability Company, and the second is referred to as Limited Liability Company. In the former type of business, the business’s liability is stretched to the personal asset of the business owner, such as a house, car, and other personally held assets. In the latter type of business, the liability is restricted to the assets of the business and its company, such as fixed assets, plants, shops, machinery, commercial vehicles, office furniture, etc. Check out America's Best Bookkeepers

It is suggested that business owners of small firms should only think about bankruptcy if their assets are at risk of being liquidated by individual creditors and financial institutions. However, if only the business is liable, bankruptcy should be weighed against the benefits of going out of business.

New business owners should register their firms as Limited Liability Corporation (LLC.) This registration will provide the business owner a safeguard for their personal and individual assets from creditors and financial institutions. Small business entities that run themselves as proprietorship or partnership firms are at significant risk of exposing their assets. However, even when the business entity is a limited liability company, the personal assets of the owners or directors may still be at risk in the event of recourse, provided if the directors of the corporations have provided personal guarantee as part of security and collateral to the creditors and financial institutions. Check out America's Best Bookkeepers

One mistake that leads to bankruptcy is when the owner does not draw a line between business operations and personal finances. In this scenario, the court will give out the verdict that since the business owner did not deal with the operations of the business and personal needs separately, the assets of both the firm and personal belongings will be considered as one. It is another matter and debate that creditors and financial institutions are skeptical in providing any financial security to such business entities without any proper tangible collateral.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers

Worried mature couple calculating home finances. Man and woman are sitting on sofa, in brightly lit home.
No one considers filing for bankruptcy to be a great idea and even top attorneys would suggest you consider it as a last resort. For most, the disgrace, guilt, and fear of bankruptcy are enough to find alternate solutions and, to top that, it literally puts your credit score in tatters. Avoiding bankruptcy is the priority of many people, even if they have to take extreme measures.

It might be easier to overlook the repercussions of bankruptcy as a bystander; ask anyone who has had to face this situation. Therefore, you should seek all possible solutions before taking such an extreme step. Here is a list of certain possible alternatives that you can explore before taking that route.

Avoiding Bankruptcy

Sell your Assets

Selling off assets is one of the most utilized options to save oneself from bankruptcy. You can try to pay your debt by selling whatever assets you can quickly dispose of, as debt payments must be made in time. If you take too long to make your payments, it might already be too late.

All of your assets, including land, furniture, jewelry, electronics, etc., could possibly help you in paying debt. Some people are very attached to their things. However, they must realize that these things are temporary and, if you live to fight another day, they will eventually come back. Right now, the priority is avoiding bankruptcy at all costs because that may leave you with nowhere to go.

Settle your Debt

One way to avoid bankruptcy is settling your debt with an IRS payment plan. You may have to live hand to mouth for a certain period of time and cut out the majority of your superfluous expenses, and even some essential ones. You can live without a cell phone, satellite TV, and expensive meals for a while if it helps to avoid the ignominy of going bankrupt.

You will have to sit down with the IRS and devise a payment plan or hire an expert for the same purpose. You may have to endure the pain of working an extra job or two to make ends meet and pay your debt. However, this may be the only way forward for you.

Request your Creditors

You need to let your creditors know that you are in a distressful situation financially and hope that they are willing to help you in any way possible. You need to tell them about your plan for paying off the debt. If they are convinced, they might reduce your interest rate or monthly payments significantly.

You could be enrolled in a hardship program designed by banks and credit card companies to deal with similar situations. Before enrolling in a hardship program, ensure that the interest rates will actually go down or you could end up with an even higher minimum payment.

Seek Professional Help and Consumer Credit Counseling

Some people are not so good at convincing others. Seeking professional help is the only way forward for some as there are experts in the field that can guide you in the right direction. Even the new bankruptcy laws require you to seek credit counseling before filing for bankruptcy. The professional will meet with you and work on a possible payment plan within your budget. Avoiding bankruptcy means taking extreme measures as there are always holes in your budget that can be found and utilized.

As a last resort, you may turn to your family or friends to borrow money, but be wary. Depending on the situation, you may decide to choose this option, however, proceed with extreme caution.

Check out America's Best Bookkeepers


About Complete Controller® – America’s Bookkeeping Experts
 Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

 

 

 

 

 

 

 

 

 

Close up shot of businessman holding leather briefcase while walking upward on the stair outdoor in city.
Bankruptcy isn’t the end. There are businesses that managed to grow out of it. They learned lessons that helped them grow better and bigger. One of the biggest lessons to learn from it is that, at the end of the day, it is the fundamentals that matter – everything else is secondary.

We should learn from these examples to understand what helped them turn the tide. There is no magic formula involved. Below is an account of all the lessons you need to learn in order to make your business grow successfully. After reading this article you’ll understand why we emphasize so much on business fundamentals.

 

1. Importance of Cash and Proper Bookkeeping

Cash is all that matters. It’s the most fundamental aspect of finance and, even still, most businesses neglect to remember its importance.  

When speaking of businesses that went from bankruptcy to millions of dollars in sales, nothing they’ve achieved would’ve been possible without over articulating over every dollar they spent. If you want to uplift your company, you should keep track of everything. Invest each penny you save, calculate returns on investment, and keep looking for other investment opportunities. Before you invest, research properly and only invest in those assets in which you have confidence. Remember, a penny saved is a penny earned!

 

2. Learn the Importance of Hiring

We don’t have enough words to emphasize the importance of hiring well. We’ve seen many organizations that overlook the hiring process. One rule that you should keep in mind is to hire people who are looking to add value to your company and not waiting for just a paycheck. It’s simple. Hire self-motivated individuals, otherwise, they will turn into a liability.

A liable hiring is a leech – it will suck your organization’s profits without letting you know a thing before it’s too late. A poor hiring disturbs the whole organization and what seems minor on the exterior is disastrous for the organization in the end. Look for passionate employees who want to be entrepreneurs. Hire dreamers. Such passionate employees not only uplift themselves but also uplift your business in the process.

 

3. Don’t Take Negotiations Lightly

Take every negotiation as if your life depends on it. Prior to any negotiation, develop a war strategy – that includes identifying all of the important points and developing a proper plan according to it. Your aim should be to get your hands on every piece of information that you could possibly get about your potential client. Go to their websites, social media pages, press releases, etc. If you have prior information available, you’ll know what to say and what not to say. Such tiny things matter a lot in sealing the deal as. Negotiate your way out of bankruptcy.

4. Be a Leader

As you grow in your career, your individual brilliance and skill set will only take you so far. You might know already that the most important thing is the quality of your leadership.

Many mistake leadership with dictatorship. That’s not what leadership is. Leadership is about balance, as you should know when to speak and when to listen. You should know which of your employee is best suited for a particular job. A leader also knows their own strengths and weaknesses. The deepest insight into your business surfaces when people from finance, HR, marketing, management, sales, and customers all come to one page and share their opinions freely.

Investors don’t invest in your plans; they hardly ever dig into the details. They look at leadership. They invest in the business that they believe will make them money. Therefore, if you cannot lead, you should learn either to lead or to hire a leader. Nothing ever grows without a leader!


Conclusion

New ideas, philosophies, and management ideas keep on coming year after year, all of them carrying their own unique importance. However, it’s the business fundamentals on which they are built. Most of them are just the revival of old ideas.

Business fundamentals will always remain the same no matter what shape a business occupies. Moreover, with ever-growing technology, people are drifting away from the fundamentals which is terrifying, to say the least.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

Close-up of a bankruptcy petition
When hearing the word bankruptcy, the first thing that crosses our mind is that it represents failure and shame. However, for many people around the world, bankruptcy is the path that can lead them out of a financial crisis. In conclusion, it isn’t for failures, it is for the people who realize and accept that, in order to be successful, they must start over.

There are a lot of things that can lead one into bankruptcy. Unexpected crises such as medical emergencies, loss of employment or a hefty loss in business can all cause irreversible damages to a person’s finances. Moreover, the average American is burdened by so many debts and expenses that it can get extremely difficult for them to sustain themselves financially. Speaking in terms of numbers, the average credit card debt for an American is around $15,800, student loans can amount to $24,000 on average, and mortgage debt can be a liability of at least a $100,000. The burden of repaying these, coupled with other expenses such as insurance premiums, vehicle loan payments and the basic costs of living, can cripple people if they are hit by a crisis which has a substantial impact on either their income or expenses.

Bankruptcy is considered, by many, to be somewhat of an extreme measure. However, by looking into the specifics, dynamics and the workings of bankruptcy, any individual can figure out if it will be a good decision to declare bankruptcy for the sake of their financial future.

Who is Bankruptcy for?

As said before, bankruptcy is an extreme decision. However, it can be a positive option for people who are unable to pay their debts despite the fact that they are minimizing their expenses. But, there are some things that you need to try before considering filing for bankruptcy. Your first efforts should be put towards renegotiating your debt. This can be done through credit counseling or a debt reduction program. Renegotiating might damage your credit score, but filing a bankruptcy means not being able to take out any kind of loan for several years. You should try to get the best results out of a renegotiating attempt if you plan on taking out a loan later on. In the case that you still must choose bankruptcy, you should adapt to living with your current income and, after becoming eligible for loans again, avoid making decisions that could land you in a financial crisis all over again.

What is Bankruptcy?

In simple terms, bankruptcy is like flicking the switch of your debt history off and then back on. It resets your consumer debts such as those associated with your credit card, vehicle, mortgage, etc.

Filing for bankruptcy means cutting off the relations with your creditors so that they won’t pursue you for payments and you won’t be able to get new debts from them (at least for some amount of time).

It is a misconception that bankruptcy ruins your reputation. It might hurt your chances of getting loans and credit, but that is all. It is basically a personal decision that enables you to restructure and renew your financial situation for the sake of yourself and your family.

Bankruptcy does not mean Losing Everything

It is widely (and wrongly) believed that bankruptcy leads to the loss of all assets. However, contrary to this, many assets that you own are protected by bankruptcy laws within the bankruptcy court. The assets include furnishings, retirement saving accounts, basic homes and vehicles (inexpensive ones). The specifics vary state to state and at the federal level, so you should check the laws in your state or area to have better information about what is protected.

On the federal level, retirement accounts are protected to a limit of $1,171,650. Other things that are protected include your 401(k) account, pension, disability, IRA and Social Security benefits. This is the reason why many lawyers recommend against borrowing from a protected account for the repayment of debt.

Benefits and Costs of Bankruptcy

There are many things that you need to compare in order to be sure that declaration of bankruptcy is feasible.
First, you should know that, on average, filing bankruptcy costs $2,500. In order for it to be feasible, the debt relief you get by filing bankruptcy should amount to more than $2,500.

Second, if student loans are your primary form of debt, then bankruptcy won’t have much of an effect because it isn’t possible to dismiss student debt in bankruptcy. The possibility of student loans being discharged is only present in a limited number of circumstances.

If your primary debts are unsecured such as credit card debt, medical debt, etc., then it might be easier for you to remove these via bankruptcy.

Conclusion

Bankruptcy can be difficult, both emotionally and because of the fact that it might damage your financial portfolio, hindering your ability to easily get loans in the future. However, it can be a tool for many to break free from loans that might be limiting and even posing a danger to the financial future of their family. If used wisely and strategically, it can help you start over and avoid any kind of mistakes you made in the first place.

Check out America's Best Bookkeepers
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual accounting, providing services to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks file and critical financial documents in an efficient and secure environment. Complete Controller’s team of  US based accounting professionals are certified QuickBooksTMProAdvisor’s providing bookkeeping and controller services including training, full or partial-service bookkeeping, cash-flow management, budgeting and forecasting, vendor and receivables management, process and controls advisement, and customized reporting. Offering flat rate pricing, Complete Controller is the most cost effective expert accounting solution for business, family office, trusts, and households of any size or complexity.

 

Bankruptcy - Complete Controller

Filing for bankruptcy is probably the last resort that people and businesses want to be reduced to. There are several reasons for it. On the other hand, some view this as a way out of a sticky situation. We will discuss the debate on whether bankruptcy is an instrument for liberty or not. The answer to this can vary widely based on the situation you are in. So, let’s look at both sides before coming to any conclusions. However, first, let’s understand what bankruptcy is. Check out America's Best Bookkeepers

What is Bankruptcy?

In the eyes of the law, bankruptcy is a legal process in which an individual or firm’s liabilities and assets are weighed to decide whether they can still pay off their debt or be legally exempt from this. However, an individual or business must first file for bankruptcy before the court considers their plea. This can be done in two ways. A person can file for bankruptcy on their own or hire an attorney to do it. If the court does declare you bankrupt, they will take control of all or most of your assets to pay off your creditors. Not only will your creditors not be able to contact you asking for what you owe them, but you will also be declared debt-free. On your behalf, the only dues not cleared are the loans you co-signed with someone, student loans, alimony, child support, or money you owe to the government, such as unpaid taxes, penalties, and fines. You will further have to pay for the case of bankruptcy to be filed in court.

Pros of Filing for Bankruptcy

In some cases, it is a good idea to file for bankruptcy due to the following reasons:

  • You will legally become debt-free
  • Lenders will no longer pester you
  • You will get a fresh start Check out America's Best Bookkeepers

Cons of Filing for Bankruptcy

Filing for bankruptcy has a lot of disadvantages as well that need to be taken into consideration, such as:

  • Your property, bank accounts, and other assets might be sold off or seized to pay off your debts
  • Your bankruptcy will become a public domain that can be easily accessed through the court records
  • It will become harder to secure a mortgage

Is Bankruptcy an Instrument for Liberty? Check out America's Best Bookkeepers

In our opinion, bankruptcy can be an instrument for liberty in some cases. If you are under a ton of debt, your assets aren’t sufficient to pay them off, and you are constantly being pestered by lenders, filing for bankruptcy is the right option. However, even after declaring bankruptcy, it is not a guarantee that your creditors will stop bugging you. Secondly, after filing for bankruptcy, you will have no assets to fall back on. You will have to rebuild your life from scratch unless it is in huge multinationals that will need some restructuring, cost-cutting, bookkeeping scrutiny, and a few tough decisions made in the ownership.

On top of this, your bankruptcy will become a matter of public record that can easily be accessed by potential lenders, landlords, and employers. You might have a more challenging time renting or getting a loan. Landlords and banks may assume that you are a liability and will have a hard time paying your dues. Yet, are these issues a problem compared to your mounting debt? If you have nothing left to lose and no way out, the only option to free yourself may be declaring bankruptcy.

Will You be Free after Filing for Bankruptcy?

Filing for bankruptcy is just the tip of the iceberg. Not only will you have to pay for filing the case, but if you aren’t filing the case yourself, you will also have to hire and bear the fees of an attorney that will cost you a decent amount of money. Going to court and simply stating that you’re broke isn’t enough. As ironic as it sounds, you will have to pay money to declare that you don’t have money.

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Bankrupt - Complete Controller

Bankruptcy is a word that no individual or business wants to hear, let alone, experience. However, sometimes issues arise beyond one’s control leaving them with no other choice but to employ an extreme solution. You should never feel shame if you do have to file for bankruptcy as it does provide some immediate relief.  However, the best way to avoid financial devastation is to be prepared for the future.

This includes not only knowing what bankruptcy entails but having a good understanding of the main reasons people file.  Below are three main life events that can result in having to file for bankruptcy:


Check out America's Best Bookkeepers

Medical Expenses

According to recent research, leading experts estimate that 62% of bankruptcies are the result of overwhelming medical bills. Both the rising cost of health care and limited coverage provided by insurance agencies has resulted in insanely high medical bills that are often left unpaid.

The cost of healthcare in the US is extremely high. This is due to the high expense of incorporating the latest state-of-the-art technology, administrative costs, and the cost of pharmaceutical drugs and specialty services. 

It is increasingly difficult for patients to find affordable healthcare with and without insurance. Insurance plans are confusing and complicated and often do not even cover specialists such as dentists, orthodontists, and cosmetic surgeons. In order for insurance to cover office visits, procedures, lab tests, treatment, and mediations, they have to be deemed medically necessary.  This process in itself is costs time and money and any errors can lead to denied coverage for the patient and denied payment for the provider.

Often time in order for insurance to even kick in and cover treatment patients have to meet a deductible and pay a premium which can be extremely expensive as well. Unexpected injuries or illnesses, severe or acute, can end up costing thousands and thousands of dollars. These bills can easily wipe out all of your savings and retirement funds.
Check out America's Best Bookkeepers

Job Loss

The second reason for bankruptcy is unemployment, which tends to lead to bankruptcy. This is true, especially when the economic cycle goes through a recessionary trend or a company starts to curb its expenses and lays off its employees by downsizing. Whether the reasons are termination, resignation, or a layoff, these factors can be traumatizing – mentally and psychologically. Losing a job can show the wrath of bankruptcy if a person does not have emergency funds to cover all of their expenses for at least six to twelve months.

Most companies are moving towards a cost-cutting strategy to manage their budgetary expenses. Consequently, and for most employees, this results in pay cuts, reduction in bonuses, or downsizing. They were subsequently leading employees towards bankruptcy.

One definitely cannot eradicate the probability of losing a job, but there are several actions that you can execute to reduce the likelihood of such odds. For instance, be a productive and valuable worker with a great attitude that your employment place does not want to lose. Not only this, but you can also add some new skills in the form of extra certifications or licenses. With time, you can improve your credentials and widen the scope of job eligibility for some other job. Check out America's Best Bookkeepers

Divorce

Divorce is also considered a significant event that can lead to bankruptcy. When a marriage dissolves it can create an immense financial strain on one or both partners. The cost of divorce includes high legal fees and sometimes alimony payments.  Equal division of the assets and custody disagreements can contribute to very expensive legal and court fees. Even if the divorce is amicable, it can be difficult and stressful to adjust to running a household with one income instead of two.

Conclusion

These top three life events are the most common causes of divorce.  Instead of having to rely on loans and credit cards and incurring even more debt, it is smart to plan ahead. Safeguard your finances by establishing a savings plan and emergency fund. By managing your finances now you can greatly prepare for the future and avoid financial ruin.


Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers
Bankruptcy - Complete Controller

Everyone hopes they will never have to face the problem of filing for bankruptcy. It is a big decision and can hurt someone financially for an exceptionally long time. If you are in a situation and considering bankruptcy, you should know that there are many other options to try before taking the final plunge. If you are afraid that you might head in that direction, there are quite a few things you can do to change your situation. Check out America's Best Bookkeepers

Cost Management

In a situation when you are considering bankruptcy, you might want to take a look at your expenditures. Marking differences between needs and luxuries will help a lot in understanding how much you can cut down on your spending. In today’s world, where purchases through credit cards are rampant, and other loans such as mortgages, rents, and significant investments are standard, one can easily spend way more than they are earning. You may also be paying a lot of discretionary expenses, such as having a premium service for something you can get for less or even free.

Establishing a proper budget and bookkeeping to calculate your income to expense ratio will allow you to see the things you can exclude from your expenses. One of the first things you should look at is subscription or membership services that you don’t use very often. For example, gym/pool memberships. If matters are critical, consider canceling the services that you identify as a luxury. You’d be surprised by how much you can save with just a few changes. Better yet, they might be able to help you delay your decision in filing for bankruptcy. Check out America's Best Bookkeepers

Do Not Accumulate More Debt

This advice is crucial in avoiding bankruptcy. It would help if you stopped spending beyond your means. Stop using credit cards as doing so will help a lot in getting back on track financially. Your primary focus should be on paying off your credit card bills as soon as possible to avoid building up interest.

Avoid applying for any loans such as home equity or car loan, which may cause your credit score to drop, which can worsen your financial situation. If you must take out a loan, consider checking your credit score before making the decision. Prioritizing the repayment of loans and debt in your budget is vital.  Make a plan that will help you repay your loans quickly so that you don’t get burdened by higher interest fees.

Increase your Income

This increase might not be possible for many people, but squeezing in a weekend or part-time side job can help a lot in streamlining cash flow. The extra cash can go towards the repayment of debt. Freelancing is pretty trendy these days and, if you have the skills, you can make money to put towards solving your financial issues. Other side jobs, such as waiting tables or driving your car with Uber, can also help you out.

Try Negotiating with your Creditors Check out America's Best Bookkeepers

Reach a compromise with your creditors on the repayment plan for your debt. Extending the date of maturity or restructuring the entire payment plan altogether can help you get out of the financial crisis that you are facing. Try reaching an agreement before consulting a bankruptcy lawyer. Once you do reach an agreement, however, get it in writing to be on the safe side if the creditor acquiesces.

Get Professional Help

Consult multiple legal and financial professionals before filing for bankruptcy. At a bare minimum, consult a debt relief attorney alongside a bankruptcy attorney to get the entire picture. Speak to your accountant or bookkeeper to get an even clearer idea. These professionals might also help you find other ways to get out of debt and weigh the advantages and disadvantages of each decision.

Create an Emergency Fund

If you have solved your bankruptcy dilemma, this is the best time to invest in a savings account or emergency fund. Both of these will be able to help you in case you run into any financial issue in the future.

Keep the repayment of loans prioritized until you have eliminated them and try not to get new loans that can hurt your credit rating or financial situation. Continue saving up for times when you might be very much in need of money.

 

Check out America's Best Bookkeepers About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity. Check out America's Best Bookkeepers