Bankruptcy is insolvency or being declared bankrupt. It is of three categories:
1. Individual Bankruptcy.
2. Company Bankruptcy.
3. National Bankruptcy.
This state of bankruptcy comes after reckless spending and without taking into consideration of existing income and taking loans out of their paying capacity. This state of finances should not be allowed to come and should be avoided at all costs under our command as it hits the good reputation of the individual or the company. This speaks volumes of poor reflection of one’s economy. A bankrupt individual or company is not qualified to take loans from the banking industry. It tarnishes the good name and fame of the individual or a company. So, it should be avoided at all costs. You may get bankruptcy information .
Some important tips to avoid declaration of bankruptcy that may be immediately taken before the arrival of the state, or as under:
1. For this budgeting of the expenditure may be carefully planned for a year or a specific period and meticulously executed.
2. Reckless spending may be stopped forthwith.
3. Credit card should be surrendered and no expenditure should be incurred through credit card.
4. Only essential expenditure may be allowed and unnecessary expenditure may be pruned or avoided.
5. Vigorous steps may be taken to increase the income to cope with the expenditure as budgeted.
6. Any dead assets may be liquividated and income may be increased by selling out the dead stocks.
7. For future planning of the projects, suitable savings may be planned in a phased manner. So that further loans, if required may be arranged from the banking institutions.
8. This unfortunate situation should not be allowed and be avoided to save the health and happiness of the individual. This should also avoid undue and uncalled for stress and strain.
So in view of the above it is concluded that if vigorous efforts and steps are taken this state of bankruptcy may not be allowed to come.