Personal bankruptcy

Training 505 minutespersonal bankruptcy

You are 45 and your small print shop has closed. You owe $38,000 and your income has halved. "Bankruptcy" sounds scary, but also like a way out.

Training goal: Choose the exit that costs the least

Situation

1. You read online that bankruptcy "wipes out all debts". You want to file tomorrow.

2. The advisor suggests trying talks first: lower rates and spread payments over a 4-year plan.

3. Two card lenders refuse. Bankruptcy is back on the table. You think of signing your car over to your brother first.

4. Bankruptcy is approved. Most debts are cleared, but child support and fines remain. What next?

If your debts exceed a year of income, find a debt advice service in your country and book a session.

What debts are not cleared by bankruptcy?

Usually child support, fines, damages and often taxes. The exact list depends on your country.

Will I lose my house in bankruptcy?

Valuable assets may be sold to pay lenders. Many countries protect a sole home and basic belongings.

How long does bankruptcy stay on a credit report?

Usually 5 to 10 years depending on the country. Rebuilding starts with the first on-time payments.

Numbers are illustrative. A game, not financial advice.