The current economic scenario is such that a company which is doing really well today is just not able to stand on its own two feet the next day. Foreclosures and bankruptcy are the talk of the day in business circles. Everyday individuals and companies are filing for bankruptcy. It might be the only recourse in some cases, but you must be aware of the consequences before taking the plunge.
Always be aware that there are several other options that you can consider before thinking of bankruptcy. It is almost always the last option that one might have to consider. And it is also the worst option that one can go for. If you are sure that there is absolutely no other way to solve the problem, only then must you think of filing for bankruptcy. There are several consequences of declaring bankruptcy; we shall discuss some of the major probabilities.
The first and most common consequence is that it would be a permanent black mark on your record. Banks will black list people who have filed for bankruptcy. This is because they have suffered a huge loss due to your actions. Your act of declaring bankruptcy will stay on your credit record for a period of 8 years after you file for bankruptcy. While you have such a record, you find that getting loans approved will be an uphill task. Banks will reject candidates outright when they find out that the person has a history of declaring bankruptcy.
The second consequence would be that you would lose credibility. Any and every financial institution will not be ready to fund your ventures if you are planning anything. This is a big blow for budding entrepreneurs given the fact that venture capitalists are the only way that one can start off on a large capital investment venture. When the financial institutions are not willing to trust you, there would be no other way to seek capital for your venture. Even buying land or a home would become a challenging issue. Educational loans are another big thing that you must keep in mind if you have kids who are on the verge of going to college. You do not want to be in a position where you might have to end up sending them to community colleges just because you messed up with your finances although they have done exceptionally well in school.
The government might be willing to help you out in such situations but do be aware that there are a lot of strings attached with public help. You will lose total control over your assets or venture due to the fact that there is an external public body which is funding it. Hence it is very important that you find out all the implications of going with a particular move before making it. Particularly for business men it is very important to make good decision which will not haunt them in the future.
I have an outstanding credit card debt of 18,000.00. I am 63 years old and live in Federal assisted housing. I work pt and my income is about 600.00 amonth. I have small department store bills and have a good credit score about 650. I am thinking about declaring bankruptcy since I can not afford the 273.00 credit card payment and my car payment of 110.00 amonth. There is nothing left for food or insurance or nothing. Will this declaration cause my other credit cards (Am Express-200.00 bal) and store cards to close as well?? I don’t want to lose them. I have tried to work with debt agencies, but they want a deposit and a monthly payment plan, and I can not afford that either.