Implications of filing for bankruptcy

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Credit Card Applications » Research » Guides » Building Credit History » Implications of filing for bankruptcy

Implications of filing for bankruptcy


Updated: December 26, 2012

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In the current economic climate, one can never say when a company might have to close down or file for bankruptcy. Things are just not the same anymore; there is not much money moving around for companies to be able to stay afloat in difficult times. The talk of the town these days is about bankruptcies and foreclosures.

Filing for bankruptcy might seem the easy way out in most cases but you do need to realize that it should be the last option that you go for under any situation. The implications of filing for a bankruptcy are dire and you really should not put yourself in such a position unless you really have no other option left with you. Unless you realize this as soon as possible, it will become very difficult for you to go about your business without always having to beg another person for help. Try to go for all other options before you think of taking up such a drastic step. Your best bet would be to consult with some financial advisors before taking a decision.

The problem with filing for bankruptcy is that it will stay on your credit record for eight whole years before it disappears. And if any bank finds out that you have a bankruptcy in your record, you will automatically be denied any sort of relationship with them. You will be denied loans, credit accounts and even bank accounts in some cases. Banks hate people with a history of bankruptcy because it hurts them directly and the quantum of damages done can be immense depending on the size of the company that went into bankruptcy.

Another issue of having a bankruptcy in your credit record is that your image will fall in the eyes of anyone who has access to the record. And this could include your future employers, venture capitalists or any business partners. And this can be really hurtful particularly for people who are into entrepreneurship as a means for survival. If you are not able to get finding for any of your ventures, you really cannot do much with any of your ideas. This can be a really frustrating thing for people who are passionate about what they are doing. Hence it is important that you try and salvage your company without having to file for bankruptcy. Bankruptcy is a means for your personal and immediate survival but it cannot ensure that you will live a comfortable and care free life in your later years.

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