Bankruptcy itself is not a nightmare. Despite some drawbacks, bankruptcy might be an escape or the best option to handle debts with many offered protections that you might not get outside of it. Here comes some advantages and disadvantages of bankruptcy that you should be aware of:
- Possibility of dept clearance: Most debts incurred by you before the date of going bankrupt can be written off.
- Protection from harassments: If you file for a voluntary bankruptcy or even a forced bankruptcy, you are under the protection of the law. Creditors cannot contact, harass you or take any legal actions to recover the debts. They will work via your trustee.
- Protection of some properties: Your normal household items, trading tools (up to a certain threshold), your vehicle if under your fiancé,…are kept safe from your creditors in pursuant to the Bankruptcy Act
- Asset Loss: You may lose things of value that you own, including your inherited assets to settle down legal depts;
- Bad credit record: Bankruptcy will be noted on your credit record for 7 years from the date it starts;
- Losing the chance of promotion: You cannot be a director, promoter or manager of a company without permission of the court;
- Bad effects to occupational: Your licences and qualifications might be affected by bankruptcy and employment contracts might have an insolvency clause in them
- Losing freedom of travelling: You cannot travel overseas without the written permission of your trustee;
- Your prestige: Though bankruptcy will be deleted from your credit record after an average of 7 years, your name will permanently appear on the National Personal Insolvency Index (NPII)