| Understand the Impact of Personal Bankruptcy |
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| Written by Chris Blanchet |
| Tuesday, 19 January 2010 22:02 |
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The impact of personal bankruptcy can be quite serious both for an individual's personal as well as professional life.
The impact of personal bankruptcy can be quite serious both for an individual's personal as well as professional life. For many, personal bankruptcy is often a "last resort," driven partly by harassing demands of credit and debt collection companies. Although bankruptcy might seem like a quick and easy fix to the harassing calls and sleepless nights, one must never rush into making such a decision. While filing for bankruptcy can momentarily end the consequences of your financial condition, almost all others who have gone bankrupt admit that it was one of the biggest mistakes they ever made. Personal bankruptcy comes with serious consequences, both to your personal and financial life. Here are some of them: Since bankruptcy is essentially a liquidation of assets, filing for bankruptcy puts your assets at risk. This includes properties, shares, personal valuables. These items can be sold by the trustee to settle outstanding debts. Bankruptcy also puts to risk all future assets like an inheritance. Once a person declares bankruptcy his future assets would also be sold off to pay his creditors. Besides the above, the impact of personal bankruptcy affects the individual's future credit status too. An undischarged bankrupt cannot act as a company director and would not be allowed to obtain further credit till his case is dismissed by the court. Taken one step further, a bankrupt individual cannot have a direct or indirect management position in a company and cannot become a counselor, magistrate, MP, or an Estate Agent. While this might not seem like a big deal, bankrupt individuals cannot hold positions as school or college governors and also cannot work at security firms or in the civil services. What is likely the harshest impact of personal bankruptcy is something that comes after the bankruptcy notice is advertised. Given the public nature of bankruptcy, the debtor's name and personal business dealings are in jeopardy. Unlike companies who can operate under different trade names, individuals have just one name. And since bankruptcy are publicly available, anyone can access the details of your bankruptcy. Lastly, a personal bankruptcy will affect your reputation. Since the bankruptcy proceedings are very public with your financial affairs being examined in open courts, the experience will not only increase your stress levels, but can be particularly 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. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. With more than 17 years of experience in the financial services industry, Chris established a website about Bankruptcy Home Equity Loan among other topics. His site can be found at Home Equity Loan Site.org. You can get a unique content version of this article from the Uber Article Directory. |