Why is bankruptcy bad
The word bankruptcy itself has a known horrible social and economic connotation that sticks with the person for as long as the individual can settle all his/her account. For this reason, most financial experts advised to resolve in declaring bankruptcy only when there are no other options left. However, if bankruptcy is really unavoidable, here are the things that one should expect.
- On one hand, personal properties like jewelries, vehicles, saving accounts, home equity, business and the likes can be taken away if filing bankruptcy under chapter 7, and will be included in one’s credit report for 10 years.Ã‚Â Ã‚Â On the other hand, debtors under chapter 13 are able to keep their possessions by a large extent since most of their financial obligations are almost paid. However, credit reports on bankruptcy will still retain for seven years.
- Credit payments may also be taken away from one’s paycheck which may last for five years depending on the court’s decision.
- Filing bankruptcy is often announced to the public especially when the person(s) involved has an outstanding reputation in the community. Several newspapers either write stories about bankrupt individuals or they print out lists of people who filed for bankruptcy.Ã‚Â Because of the public announcement, people who are bankrupt often end up feeling humiliated and overwhelmed. One must take into consideration that in filing bankruptcy, all kinds of financial dealings made by the debtor are made accessible to the creditors and the court.
- Declaring bankruptcy is also disadvantageous to an individual in numerous ways like getting a loan regardless how little the amount is, applying for new credit cards which can be frustrating since credit card companies will likely to charge the highest loan interest in addition to annual fees just to retain the card, getting a job, and even renting an apartment or replacing an old car.