Bankruptcy does more damage to you and the people around you than you think! In all cases, it is best to avoid bankruptcy.
Bankruptcy seems to be the most convenient and easy way out during times of financial trouble to many. And often people are not ready to go in for the phrase: Avoid Bankruptcy. But majority of the debtors are not aware of two very important things:
1. Bankruptcy is not a wise solution for all debtors.
2. Bankruptcy is followed by harmful consequences, damaging all aspects of life.
Bad Effects of Bankruptcy and Why You Must Avoid them!
The disadvantages inherent to the process of bankruptcy also speak a lot in favor of why it is better to avoid bankruptcy. Following are a few disadvantages of bankruptcy.
1. Ruined Credit History: Bankruptcy creates ultimate damage to one’s Credit history. It remains in the Credit report for 10 years from the date it was discharged. Not only that, it also stays in Court Records for 20 years. The worst part of this is that it reduces the chances of getting loans and jobs in the future as creditors and employers judge a candidate first hand through their Credit Report. Imagine, for 20 years, your record will follow you through all your applications! This is one hassle many can do without.
2. Property Repossession: Declaring Bankrupt can result in losing valuable assets (non-exempt property) or equivalent cash value. You may need to part with your most treasured property.
3. Stained Social Status: Personal bankruptcy can spoil your social status. Familial relations can also be stressed due to bankruptcy as you may lose your position in your family. Friends and acquaintances also loose trust and looks down upon a bankrupt. A person declaring bankruptcy is often seen as a person who has weak financial planning.
4. Damaged Business: Filing of bankruptcy by a business owner can shatter all chances of a growing business. The damaged credit rating of the bankrupt does not qualify him for business loans. This can result in a massive financial loss not only to the business owner but to all other people associated with the business.
5. Serious Financial Crisis: After being declared a bankrupt you can expect all your bank accounts, credit cards etc to be closed. Anything that you might be leasing, or buying on hire purchase, such as your car will be immediately returned to the owner. This can however give birth to tremendous financial crunch. In actual sense, you may be in a worse off position by declaring bankruptcy.
6. Hampered aspects of Life: Bankrupts may find it extremely difficult to buy or even rent a home; acquire insurance, security clearance and buying or leasing a car. This can lead to a lot of problems and put a big question mark on the chances of having a standard and secured living. It is thus advisable to avoid bankruptcy for a safer future.
Taking the Next Steps
At all cost, try to avoid declaring bankruptcy. There are various debt management companies around who can do wonders to your debts! When all methods has been evaluated and there is no other choice but to declare bankruptcy, do consult a bankruptcy lawyer in order to properly and correctly assess your situation. Do not just consult any lawyer, look for a specific bankruptcy lawyer as he will be the person who can most correctly guide you in this difficult situation.