What is Bankruptcy?
Bankruptcy is a legal process that allows individuals or businesses to reorganize their debts and expenses in an effort to avoid going out of business. However, if you're struggling to make your monthly payments, bankruptcy may be the only way to get back on track.
Types of Bankruptcy
- Bulk Sale Plan: A plan to liquidate assets and pay creditors as much as possible within a set timeframe. (Source: https://emagazinehub.com/seeking-additional-income-can-help-you-avoid-bankruptcy/)
- Chapter 7 Liquidation: A straight-lining bankruptcy that allows you to discharge most debts, but may not be suitable for businesses or individuals with certain assets. (Source: https://www.uslegal.com/articles/bankruptcy/chapter-7)
- Chapter 13 Reorganization: A repayment plan that allows individuals to reorganize their debts and create a payment schedule, but typically requires collateral. (Source: https://www.americanlawyer.com/sections/bankruptcy/what-is-chapter-13-reorganization)
Adding Income to Avoid Bankruptcy
Seeking additional income can be a viable solution for avoiding bankruptcy. This can include starting a side hustle, taking on a part-time job, or selling unwanted assets. By increasing your income, you may be able to pay off debts and avoid bankruptcy.