If you think that filing for bankruptcy is the easiest way out of your deb problems, then you are being misled. When you start declaring that you are bankrupt, what you are basically saying to your creditors is that you cannot possibly ever repay all of your debt. It gives people who need to get out of debt and are unable to pay their bills the right to start again financially. You will have to declare bankruptcy through a lawyer.
This may sound awesome at first, however, bankruptcy filing can come to haunt you for years and that is why this decision should be taken after careful analysis and deliberation. You don’t have to become bankrupt just because you’re struggling with debts. It should be the last resort. The following are reasons why you should not declare bankruptcy:
- Ruined Credit History: Your credit history is ruined for the next 6 to 10 years. Not only that, it also stays in Court Records for 20 years. Because of this, 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.
- 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.
- Ruined Social Status: Personal bankruptcy can spoil your social status. Basically people will look down on you. Even your close friends and family members will avoid you if you file for bankruptcy.
- Serious Financial Crisis: Notification is made to everyone financially connected to you: banks, creditors, landlord, etc will be informed immediately. Expect all your accounts to be closed and anything you might be leasing returned to the owner.
- 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. Banks and other financial institutions will exploit you by charging a higher rate of interest.
- Future assets will be lost: Any asset that might have been acquired during the term of the bankruptcy, such as inheritances, insurance payouts/maturities, equity in property, windfalls, etc., and possibly pension income.
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