Negative Effects of Bankruptcy
Negative Effects of Bankruptcy : Following are a few disadvantages of bankruptcy.
Social Disadvantage :-
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 & acquaintances also loose trust & looks down upon a bankrupt.
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 & put a big question mark on the chances of having a standard & secured living. It is thus advisable to avoid bankruptcy for a safer future.
Financial Disadvantages :-
Ruined Credit History: The worst part of Bankruptcy 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. It also creates ultimate damage to one's Credit history as it remains in the Credit report for 10 years from the date it was discharged and it also stays in Court Records for 20 years.
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.
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.
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.
