Bankruptcy Records/Bankruptcy Information

The basic definition of bankruptcy is that a person or business may file for bankruptcy when its income is not adequate to service its debts and its creditors will not continue to defer payments any longer.

This is essentially like surrendering to an enemy and asking them to not throw you in a POW camp. Therefore, it is like getting a second chance without paying the ultimate price. Most likely anyone who files for bankruptcy will have a more cautious attitude next time they take on a challenge.

Unfortunately bankruptcy, while protecting you from jail and severe financially punishment, also creates a permanent black mark on your record. A bankruptcy record acts as a red flag to future investors, saying that you have made mistakes in the past and failed to make your finances work.

However, most investors have a good idea just what bankruptcy is. They deal with people everyday who have gone bankrupt. Going bankrupt is a sign that you failed, but it is also a sign that you have an entrepreneurial spirit. Something that investors are looking for anyway.

Also, most people fail several times before they find a business that can work. Investors will know that you have at least one of these failures under your belt already. This should make them confident that you are a person who has learned from their mistakes.

This is the hope anyway. Your bankruptcy record has all of your bankruptcy details on it. So future investors can see just where you went wrong. If you gave it your best, and sometimes just didn’t work out, they will see that. However, your bankruptcy record will also tell them if you are reckless.

One of the major problems with bankruptcy records is that they are made public to all (for obvious reasons). This means that a very large amount of your personal financial information can be accessed by just about anyone. This could leave you vulnerable to identity theft and fraud.

For many people, this is the worst part of bankruptcy. They will never be able to hide the fact that they went bankrupt, and they will feel stigmatized for their whole lives. However, they should take heart in the fact that they did try to do something extraordinary and they have the guts to pay back the folks they owe.

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