When in a down economy, it brings a lot of negative things.  First, a lot of people tend to loose their job or get laid off, and some jobs are completely banished.  Therefore, there is little money to pay for bills, or money that can be set aside for savings.  When times are this hard, it starts to effect everybody.  A down economy creates a trickled down effect, that really hurts people financially.

When businesses are hurting, and jobs are at stake, a lot of people file for bankruptcy.  Whether they have too much money on credit cards, can’t pay the bills, or there isn’t enough money coming in to pay the bills, bankruptcy is often known as a solution or “relief”.  Although it may sound nice to start all over again, there are some major negative effects that come along with bankruptcy.

If you plan on filing for bankruptcy, you may want to go over it’s negative effects.  Just to make sure you’re aware of what may happen in the future.  If you can, avoid bankruptcy and get some serious counseling help!

All personal items -  First of all, all your personal items will be taken away.  This means your house, your cars, all items in your house, and everything that was once yours, is no longer yours anymore.

Ruined credit – Also, your credit score will be ruined.  When you have a bad credit score it is hard to find people to loan you money, and you will often have high interest rates on anything you need a loan for.  It will take years to get it up again.

Financial restrictions – There is a only a certain amount of money bankrupts can get for credit.  Also, there are no traditional credit sources available, you must find a non-traditional credit source to get you set up.  Not to mention, the interest rates on the credit will be extremely high.

Social status – Once you go bankrupt it effects your socials status.  Every time you apply for a job, want to start a business, or you want to get a loan, you must tell them about your previous bankruptcy.

Guilt – You will have to live with the guilt of knowing you’ve gone bankrupt.  People come close to bankruptcy, but have found ways to get out of it and get help!  See if that is an option for you!

Bankruptcy is something nobody ever wants to go through.  Although unwise decisions can get you there.  If you are planning on filing for bankruptcy, see if there is any help you can get before making that big move.