The Dangers of Bankruptcy  

We heard about the mishap of 50 Cent recently about him filing bankruptcy. As much as possible, we want to avoid this kind of financial turmoil because we are minutes away from getting kicked from our house and being broke. We do not want to live with nothing and start from scratch again. Filing a bankruptcy will break us and if we are not that strong to get back up again, who knows where we are heading.

Bankruptcy also happens here in Singapore. Bankruptcy happens when a person owes more money that he/she can pay. To understand it better, bankruptcy is regarded as “reset” button. The reset button will allow us to start from scratch. Bringing with us nothing but lessons, we can still get back up again and at least recover but only a few ever get rich again.

We file for bankruptcy when we owe at least $10,000 and we have no way of repaying it. Once this happens, consequences will roll in. We will not like the consequences and it can quite taint our name. Knowing this, it is important that we should avoid bankruptcy. So, how can we avoid such misfortune? Here are the reasons:

• Difficulties in looking for jobs: Yes, bankruptcy is not the end of the world but somehow it is the end of our career. When we file bankruptcy, many companies will have doubts and it will be harder to look for jobs.

The worst thing that could happen is our company terminating our services because of the misfortune. Our bankruptcy reflects how we manage our finances and who would trust us with theirs? If we are given a second chance, we have to make it work and prove that we will not be in an unfortunate position again.

• Restrictions in travelling: If we filed bankruptcy, we are allowed to travel within the country but not outside. Travelling overseas is restricted. Creditors will interpret going overseas as a means of escape. Creditors wouldn’t want that.

• Restrictions in obtaining credit: When bankruptcy was out of the picture, our credit rating is as high as it can go. Bankruptcy will only give us heartache because we cannot obtain credit and if we can, it will not be greater than $500.

• Restrictions in managing business: Bankruptcy is not something that we can just ignore. Even if we already paid our debts, we are restricted to manage any business let alone act as a director of a company here. We will forever bear the taint of bankruptcy.