When you file for bankruptcy, you should have an idea of what the whole process holds in store for you in terms of the consequences that you will have to face. There are both the positive and negative outcomes of filing a petition of insolvency. You should therefore weigh the options and see whether the outcomes are worth the hassle. This is why it is so highly advisable to only consider filing for insolvency as the last resort because in most cases, bankruptcy will weigh heavily on you and will wear you out, financially and psychologically.
The consequences can be categorized into different factions, which include financial, legal as well as vocational. To begin with the legal aspects, you may get a bankruptcy restriction order. This is especially if the events leading to your financial crisis are illegal by nature. These activities include gambling, speculation and theft.
On the financial aspect, you will lose much of your assets, but again depending on the chapter under which you file a petition. If you do so under chapter 7, you are bound to lose much because the chapter calls for the liquidation of your assets. Furthermore, your account is bound to be closed down and you might have to begin from scratch. Getting credit facilities will also prove hard especially at the mention of insolvency. What may not be affected much are car loans and mortgages.
The vocational consequences refer to how your career and job aspirations will get affected. If you are a lawyer or a company director, be assured to lose your job. Potential employers will tend to keep off, until you have worked on rebuilding your credit rating. If you are in business and a sole trader for that matter, your business will close down and your employees dismissed.
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