An individual or a company files for bankruptcy when they face panicking financial turbulence. There can be number of reasons why people aren't left with any other option except to file for bankruptcy. It is observed that one big reason why people prefer to file for bankruptcy is that it provides them with ample time to hire a lawyer for financial consultancy. Filing for bankruptcy means an attempt to stop foreclosure, to avoid reclamation of assets and to safeguard oneself from various lawsuits.

A person in debt can become an easy pray to creditors as they try to squeeze money out of him/her, using all sorts of tactics. Often in extreme cases, the creditors file a claim against the debtor. This might result in foreclosure of possessions along with other charges. Filing for bankruptcy, not only stops the progress of such actions, but also gives the person a chance to start all over again. A bankruptcy lawyer will make certain that the credit of their client is restored.
When a business opts for filing bankruptcy, the lawyer takes care of each and every aspect of the situation. A lawyer can ask for liquidation of all the assets for paying off the debts, or he/she can come up with a proper court permitted plan which allows the business to pay over a certain period of time with lesser interest.
Which of Your Asset is at Risk?
There are certain assets that you simply need to part with, in case you file for bankruptcy. Such items include any superfluous possession. If you have been a collector, nothing can save your precious collections from the law. If you possess any sort of a hobby item, then be prepared to lose it. There is no way that you can safeguard your personal finances, cash or any of the back accounts. Keep in mind that bankruptcy will compel the sale of extra residence or cars, as well as most of your jewelry.
Rescue your Assets
Your hard earned assets can get snatched from you in the blink of an eye if you do not play smart during bankruptcy. It is important for you to recognize that there are certain possessions that can be shielded.

Here are some economical ways to protect your assets:

1. In the situation of Bankruptcy, assets can be transferred to your spouse's name. This is the easiest and most common way to save an asset. Yet, it is not a good option if you are on the verge of getting a divorce.
2. You can also put more wealth into your employer-sponsored retirement plan since it might have unrestricted security.
3. Another easy way is to make the most of your state's laws concerning homesteads, annuities and life insurance. You can use your cash to pay your mortgage to save it from being susceptible to creditors.
4. Avoid mixing business assets with private assets. That way, if your business runs into a crisis, your personal assets might not be at jeopardy and vice versa.

The purpose of bankruptcy is surely not to strip you of all you have, but rather to help you handle a load of debt that has gotten you worried.