Understand the Impact of Personal Bankruptcy
2:09 AM
For those who are considering personal bankruptcy, it is unlikely that all of the personal and professional consequences are known. However, the impact is quite serious and, often, harmful.
For a lot of people with a lot of debt, personal bankruptcy might seem like a popular option, particularly when debt and credit collectors are calling and making harassing remarks. While bankruptcy might promise to be an easy fix to the calls and sleepless nights, you should never hurry into bankruptcy. Although it can end the calls, it frequently proves to be the biggest mistake that prior bankrupt borrowers ever make.
Personal bankruptcy comes with serious consequences, both to your personal and financial life. Here are some of them:
One of the biggest risks that bankruptcy poses to the debtor is that assets are often sold by the trustee to settle debts. Assets are anything of value, including property, investments, and other items of value.
Bankruptcy might not only put current assets at risk, but future assets as well. In the case of an inheritance, creditors may also have a claim against such funds in order to settle their debt.
Besides putting current and future assets at risk, the impact of personal bankruptcy includes a damaging credit report that will affect any intentions of becoming a company director or obtain any non-personal credit for the rest of your life.
Perhaps the worst impact of personal bankruptcy comes after the bankruptcy order is advertised locally. This damages the reputation of an individual's name and personal business dealings. Unlike companies, individual debtors cannot trade under a different name. So for the debtor who has declared bankruptcy in the past, all of this information is available in the public domain.
A bankrupt also cannot hold any direct or indirect position in the management of a company. He cannot take the seat of a Counselor, Magistrate, MP or an Estate Agent. He cannot serve as a school or a college governor. People who have declared bankruptcy also cannot seek employment in security firms and civil services.
Personal bankruptcy will have an impact on your reputation. With your financial affairs being examined in an open court, the process will not only prove to be extremely stressful, but others have found the whole experience rather humiliating.
On top of all of this, a personal bankruptcy will have even more of a financial impact given the court costs and processing fees that come with filing.
If bankruptcy as a debt-clearing option is something you are considering, gather as much knowledge as you can about the alternatives. There are plenty of websites and e-books available on the topic and can be located rather easily on the internet.
For a lot of people with a lot of debt, personal bankruptcy might seem like a popular option, particularly when debt and credit collectors are calling and making harassing remarks. While bankruptcy might promise to be an easy fix to the calls and sleepless nights, you should never hurry into bankruptcy. Although it can end the calls, it frequently proves to be the biggest mistake that prior bankrupt borrowers ever make.
Personal bankruptcy comes with serious consequences, both to your personal and financial life. Here are some of them:
One of the biggest risks that bankruptcy poses to the debtor is that assets are often sold by the trustee to settle debts. Assets are anything of value, including property, investments, and other items of value.
Bankruptcy might not only put current assets at risk, but future assets as well. In the case of an inheritance, creditors may also have a claim against such funds in order to settle their debt.
Besides putting current and future assets at risk, the impact of personal bankruptcy includes a damaging credit report that will affect any intentions of becoming a company director or obtain any non-personal credit for the rest of your life.
Perhaps the worst impact of personal bankruptcy comes after the bankruptcy order is advertised locally. This damages the reputation of an individual's name and personal business dealings. Unlike companies, individual debtors cannot trade under a different name. So for the debtor who has declared bankruptcy in the past, all of this information is available in the public domain.
A bankrupt also cannot hold any direct or indirect position in the management of a company. He cannot take the seat of a Counselor, Magistrate, MP or an Estate Agent. He cannot serve as a school or a college governor. People who have declared bankruptcy also cannot seek employment in security firms and civil services.
Personal bankruptcy will have an impact on your reputation. With your financial affairs being examined in an open court, the process will not only prove to be extremely stressful, but others have found the whole experience rather humiliating.
On top of all of this, a personal bankruptcy will have even more of a financial impact given the court costs and processing fees that come with filing.
If bankruptcy as a debt-clearing option is something you are considering, gather as much knowledge as you can about the alternatives. There are plenty of websites and e-books available on the topic and can be located rather easily on the internet.
About the Author:
Chris Blanchet is the author of the Personal Finance e-book Help Fix My Finances, which also serves as the premise for the Members Only website of the same name. His blog can be found at How To Repay Debt. Get a totally unique version of this article from our article submission service
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