We've all heard of some people being so over stretched with their credit card usage that they apply for a new one to service their existing credit cards. They can only go so far with this method until the financial institutions refuse them another credit card. In the meantime, the interest they are paying on all of their cards is huge. They pay only the minimum interest, leaving the principal debt often untouched. Additionally, there is still the electricity bill, the mortgage or rent and food bills to pay.
These days it is less of such a social stigma, mainly because it happens to many more people and businesses than it used to. In other words, it is becoming more common and more acceptable as a debt solution. It is still not to be considered lightly, however. There are significant repercussions for anyone who is thinking of becoming a bankrupt or is already declared a bankrupt. Fore example, you can't obtain further credit for at least a year because of your history as a bankrupt. Often a bankruptcy notation remains on your credit file for five years or more. Your reputation in business suffers. Companies are hesitant to hire a bankrupt.
It is a matter of public record in that the Official Receiver has to advertise the fact that you are applying for bankruptcy proceedings. The advertisement is usually in local and national newspapers or official publications such as the London Gazette, depending on your circumstances. The person handling your case will also have to inform certain companies and institutions who may have an interest in your financial situation.
What to do about it? They should reconsider carefully the option of bankruptcy. Even though there is less social stigma than there used to be, it can cause major problems for obtaining credit in the future. They can easily deal with money collection calls by reporting any harassment to the Office of Fair Trading or similar consumer affairs departments. They need to acknowledge that they are in serious financial trouble and to seek advice to find practical options like a debt consolidation loan.
It's all about profit, after all.You can apply to see the contents of your credit file for a fee. There are usually several credit rating agencies and a quick Google will often provide you with the contact details for each agency. Check the contents of your file from the report that you receive from them. Inform the agency of any errors so that they can amend your file. I once noticed an entry which was obviously my son's application for a loan and the agency had mistakenly added it to my file. Even if the agency refuses to amend your file, it is your right to have your comments as a "note of correction".
These days it is less of such a social stigma, mainly because it happens to many more people and businesses than it used to. In other words, it is becoming more common and more acceptable as a debt solution. It is still not to be considered lightly, however. There are significant repercussions for anyone who is thinking of becoming a bankrupt or is already declared a bankrupt. Fore example, you can't obtain further credit for at least a year because of your history as a bankrupt. Often a bankruptcy notation remains on your credit file for five years or more. Your reputation in business suffers. Companies are hesitant to hire a bankrupt.
It is a matter of public record in that the Official Receiver has to advertise the fact that you are applying for bankruptcy proceedings. The advertisement is usually in local and national newspapers or official publications such as the London Gazette, depending on your circumstances. The person handling your case will also have to inform certain companies and institutions who may have an interest in your financial situation.
What to do about it? They should reconsider carefully the option of bankruptcy. Even though there is less social stigma than there used to be, it can cause major problems for obtaining credit in the future. They can easily deal with money collection calls by reporting any harassment to the Office of Fair Trading or similar consumer affairs departments. They need to acknowledge that they are in serious financial trouble and to seek advice to find practical options like a debt consolidation loan.
It's all about profit, after all.You can apply to see the contents of your credit file for a fee. There are usually several credit rating agencies and a quick Google will often provide you with the contact details for each agency. Check the contents of your file from the report that you receive from them. Inform the agency of any errors so that they can amend your file. I once noticed an entry which was obviously my son's application for a loan and the agency had mistakenly added it to my file. Even if the agency refuses to amend your file, it is your right to have your comments as a "note of correction".
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