What is Bankruptcy??

By Brandon Zimerman

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. People usually file for bankruptcy when they cannot earn enough money to pay bills or a mortgage on their house.

A common myth that most people have about filing for bankruptcy is that it could put you back finacially for many years. This is false. According to the research center at The Ohio State University, it takes an average person 10-20 years to regain the same financial status as they had previously to filing bankruptcy.

In fact, sometimes filing bankruptcy can be a good thing. For example, 90 percent of those who went bankrupt have a car less than a year after bankruptcy, compared to 89 percent of those who never filed. About 74 percent of bankruptcy filers have full time jobs after one to five years, compared to 73 percent of non-filers.