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Bad Financial Times Of Bankruptcy

by Rachel Linster

We all go through bad financial times in our lives and I guess that this is one for you. Although it's difficult to believe, you're not alone and you're certainly not the first and you won't be the last. You're probably thinking about declaring yourself bankrupt because you know that it'll wipe your debt away and you'll be able to start afresh.

Although this sounds great, like all things in life, there's no such thing as a free lunch and the chances are that if you do declare yourself bankrupt, you'll live to regret it. The people who you'll deal with won't make life easy and they'll give you a public and humiliating ride. You'll also have a dreadful credit rating for the rest of your life which will mean buying anything of value very difficult. You'll also have no privacy with other aspects in your professional life; your bank, employer and everyone who has any dealings with you will be told about your situation. Notices will be published in newspapers which will make it impossible to keep from your friends.

Don't think about declaring yourself bankrupt if you own your own home or have other assets. Once you do declare yourself, the wheels will work very fast. Your bank account will be closed and your credit cards stopped. If you have a car on HP it will be returned, if you own it, it will be sold to pay your debts. If you are running your own business, it will be closed down and if you are set to inherit money or gain from an insurance pay out or any income whatsoever, it can be seized. In addition, if you belong to many associations and societies you will find that you'll no longer be made welcome.

Even if you have a young family you can be made homeless and if you've thought ahead and put the property in your partner's name it will still be taken away unless you can prove that your partner paid the full value for it. If you start up a new business and put the profits into someone else's name you will be arrested as this is considered a criminal act. There is no way round.

The thing to do is to act before the crisis happens. However bad your financial position is, there are people who can help you without taking you through the humiliation of bankruptcy. The usual alternative will be debt consolidation which means that all your debts will be put together and you will hopefully be able to negotiate a reasonable rate of interest over a long period. If you can also offer a secured loan, in other words you give the company the security of your home against the debt, you'll find that you'll be able to negotiate a far better rate of interest. Don't accept anything that you worry that you won't be able to maintain. It's much better to be open and honest and to say that you can't manage a certain amount rather than let your new company down after a couple of payments.

About the Author:

Rachel Linster - http://www.ourbankruptcy.com

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