Disadvantages of Personal Bankruptcy Filing

Just like there are two sides to every coin, there are advantages and disadvantages to bankruptcy, and in particular, personal insolvency. It is said to be an option to filing for insolvency, but be well advised, take annotation that it should only be considered when all else fails. You should then weigh the pros and the cons and see whether you really need to go the personal bankruptcy way.

Personal insolvency, like all other forms of relief from financial distress, puts you under a lot of scrutiny financially. Any firm you approach for lending will want to know about your credit description. At the mention of insolvency, many may shy away and not be willing to extend any loan facilities to you. If they do, they will charge you a high interest.

You may also hear a bankruptcy restriction order if the circumstances chief to your insolvency were activities of mere carelessness like gambling and speculation. If this happens, your name remains in the minutes for a period of 15 years. This will again affect your credit rating and most of your business transactions will be conducted through the bank.  

With personal insolvency, you risk losing your family tree home. Remember that personal insolvency has been defined as a situation whereby you give up a part of your property to make a discharge from your debts. Some of the assets you will have to give up are both the movable and unbending properties and this includes your own home. If your home is sold off and the proceeds are still not enough to cater for the debts, they will still come for more of your assets till you have nothing more that can be sold off.

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