You may be able to restore your credit score to healthy levels in as little as two years after filing for bankruptcy, according to Resop, but the filing may still cause you headaches. Even though it’s against the law for landlords to disqualify tenants solely on the basis of a bankruptcy, they often treat bankruptcy as a red flag. Same thing with employers: The U.S. Bankruptcy Code prohibits employers from discriminating against jobseekers simply because they’ve filed for bankruptcy, but it may still be a factor — particularly for a job involving financial transactions, says Resop.
Source: cnn.com
Video: The Unintended Consequences of Bankruptcy and Student Loans
What are the economic consequences of all this money printing by central banks?
In this financial year the Bank of England has bought £62.5 billion of government bonds, almost two thirds of the £100 billion issued by the British Government. That brings total government bond purchases by the BoE to £366 billion out of a total bond market of £1.2 trillion, so the UK central bank now holds 31 per cent of the national debt. Borrowing from yourself by printing new money? How sustainable is that?
Source: arabianmoney.net
The Negative Consequences of Bankruptcy
Article by Cecilia Rodriguez Bankruptcy can be painful, and you may not be the only one who is hurt by it. Before you file, you need to examine things closely so you can make the best decision possible for you and your family. In this article we will discuss some of the drawbacks of filing personal bankruptcy.The most obvious negative consequence of declaring bankruptcy is the damage that it will do to your credit rating. Of course, this may not be the most pressing thought in your
Source: typepad.com
Government Debt and the Bankruptcy Trickle Down Effect
So What Does This Mean? As this progresses government jobs are beginning to appear less and less secure, and the “guaranteed” benefits become more and more questionable and unreliable. People who worked for the government for a lifetime are simply dropped and left to fend for themselves in their old age, often forcing them to declare bankruptcy or putting them out on the street. This leaves us with even more people who can’t pay taxes, need government aid, or need to use the overworked and broken legal system to fight for their lives. That in turn compounds the pressure on those institutions who are then found unable to keep up with what’s required of them, which undermines trust in the institutions and erodes the public’s confidence in their government’s efficacy.
Source: thenichereport.com
Consequences Of Bankruptcy
You will desire to begin the rebuilding of finances after bankruptcy. In order to save yourself from the rainy day, you have to open a savings account and start placing your money in it. You must have sufficient funds at your disposal for at least six months in order to meet the difficulties in the future. Making a saving account will also make sure the spending in responsible manner and increase your behavior towards saving.
Source: fairloanrate.com
What are the consequences of filing for bankruptcy?
With bankruptcy filings becoming more common over the last few years due to the state of the economy, many people are wondering if it’s the right financial move for them and their families. The process carries less of a stigma now than it once did, however, there are consequences to filing for bankruptcy if it is the right choice for you. Meeting with a qualified bankruptcy attorney can help you to decide whether this process is right for your individual situation.
Source: losangelescountybankruptcyattorneys.com
Implications on the Bankruptcy Filing and its Consequences
Bankruptcy is intended to take you out of financial troubles but on the other hand, you may have to face the consequences, as it is not an easy concept. Let me discuss the consequences major to your life that can affect your living standards. 1) Credit score is effected in such a way that the other creditors you may want to get more loans from may not be able to give you loans. They will see that you were already not able to pay for the loans in the previous years and you filed bankruptcy. They may not be willing to risk their finances over you as loans. 2) Credit history is affected for a straight 10 year period. You may be under its influence for so long that you may never be able to take any kind of financial help and this 10 year effect may lose you your family relatives and friends because this happens with some people. 3) You may not be able to apply for good jobs. This is because all the employers want to hire those candidates who have a clean slate on the credit history. Those who have bankruptcy or debt issues in their credit score may not be able to score for good jobs. 4) Your reputation may be at stake. This is because when you have bankruptcy in your history, your repute may travel before you. 5) Your house, assets that are valuable like car, land and property may be taken up to pay your debts. Your bank accounts may be confiscated as well. This may be a higher rate of a consequence to you. 6) If you had capital gains on your property, the bankruptcy may have an effect on the tax calculation when the bankruptcy affected capital gains.
Source: squidoo.com
A123 Bankruptcy Casts Doubts on EV Goals
The theory was that the federal government could guide an entire US electric vehicle (EV) industry into existence by orchestrating a constellation of grants, loans and loan guarantees to manufacturers and infrastructure developers, along with generous tax credits for purchasers. That vision was attractive, because EVs have the potential to be an important element of a long-term strategy to counter climate change and bolster energy security. However, yesterday’s bankruptcy of battery-maker A123 Systems, Inc. provides a costly reality check. Along with the earlier bankruptcy of another advanced battery firm, Ener1, and disappointing battery-EV sales, it raises new doubts concerning both the government’s model of industrial development and the achievability of President Obama’s goal of putting one million EVs on the road by 2015. A123 was built around a novel lithium-ion battery technology developed at MIT. For a time they were the darling of the advanced battery sector, with a market capitalization above $2 billion following its 2009 initial public offering. That IPO came on the heels of A123′s receipt of a $249 million stimulus grant from the Department of Energy and $100 million of refundable tax credits from the state of Michigan. Subsequently, though, they experienced low sales and a costly battery recall that contributed to their signing a memorandum of understanding with China’s Wanxiang Group to sell an 80% interest in the company for around $450 million. Instead, it now appears that Johnson Controls, a diversified company that was the recipient of a $299 million DOE advanced battery grant of its own, will end up acquiring A123′s assets for around $125 million. Johnson is apparently providing “debtor-in-possession” financing for A123′s Chapter 11 process. It’s not clear whether Johnson would be able to draw down the unused portion of A123′s federal grant. Because of the government’s close involvement with A123, and in particular its structuring of aid to A123 in a manner that left taxpayers without any call on the firm’s assets ahead of suitors like Johnson Controls or Wanxiang, this event is inherently political. I was a little surprised it didn’t come up in last night’s presidential debate. If it does become a “talking point” in the next two weeks, however, I’d prefer to see the conversation focus on the real issues it raises. The reasons for A123′s failure appear very different from those behind the much-discussed failure of loan-guarantee recipient Solyndra. While the latter ultimately called into question the judgment of officials who loaned money to Solyndra when that company’s business model was already doomed, A123 highlights the much deeper challenges involved in attempting to conjure an entire industry out of thin air. The earlier failure of GM’s electric vehicle effort in the 1990s, the EV-1, demonstrated the chicken-and-egg nature of EV sales: Vehicle sales depended on recharging infrastructure that in turn depended on robust vehicle sales to justify infrastructure investment. But at least GM could begin then by relying on a mature lead-acid battery industry. Those batteries turned out to be inadequate to meet consumers’ expectations of range and recharging convenience, which led to the creation of another chicken-and-egg dependence for the new EV industry: carmakers needed a reliable supply of advanced batteries from producers who couldn’t invest in the capacity to make them, without knowing that vehicle sales would consume enough batteries to turn a profit. So in 2009 the administration set out to short-circuit all those inter-dependencies by simultaneously funding the key elements of these loops, including advanced battery makers. It makes me wonder if anyone involved had any direct manufacturing experience–a natural doubt considering that the entire US auto industry was restructured in 2009 by a task force without a single member who had worked in any manufacturing business, let alone the auto industry. The main causes of A123′s failure appear to have involved basic manufacturing issues of capacity utilization and quality control. The company wasn’t selling enough batteries to cover its costs, and too many of the batteries it sold came back in an expensive recall. They weren’t the first business to experience such growing pains, but their challenges were compounded by the burden of a manufacturing line that had been sized to meet the demand of an EV market that hasn’t yet materialized. US EV sales through September amounted to just 31,000 vehicles, or less than 0.3% of total US car sales. The picture looks even worse if you subtract out sales of GM’s Volt and Toyota’s plug-in version of its Prius, the gasoline engines of which provide essentially unlimited range, circumventing the limitations of today’s batteries. I think there’s a strong argument that the government’s assistance to A123 was actually a key factor in leading them to bankruptcy, by prompting A123 to grow much faster than could have been justified to its bankers or private investors. Perhaps it’s some consolation that A123′s technology has apparently been snapped up by a competitor, rather than going the way of Solyndra’s odd solar modules. Yet that outcome hardly justifies the casual dismissal of A123′s fate by a DOE spokesman as a common occurrence in an emerging industry. That sort of talk merely perpetuates the perception of cluelessness fostered by Energy Secretary Chu’s failure to hold anyone accountable for the Solyndra debacle. Yes, companies in emerging industries fall by the wayside, but the preferred response would be to examine what happened and apply the lessons learned to the rest of the “venture capital portfolio” with which the administration’s industrial policy has saddled the DOE. With EV sales still low and several key EV makers experiencing delays and productionproblems, a thorough public review of the entire EV strategy is in order.
Source: theenergycollective.com
Major Consequences of Bankruptcy
Bankruptcy can often have far-reaching consequences that are frequently misunderstood. Although there are some downsides to a bankruptcy filing, in my opinion, the majority of the consequences are positive and greatly outweigh the negatives.
Source: about.com
Try to climb out of debt before bankruptcy
The financial environment remains one of uncertainty and frugality for many people living in Michigan. Years of accumulating debt and riding credit card after credit card allowed people in the state, and elsewhere, to create mountains of bills with interest rates adding to those debts all of the time. Some people took on mortgages while others took out loans for new cars. Then, the bubble burst and suddenly, people could not afford what they once thought they could.
Source: michiganbankruptcyblog.net
Personal Finance: 3 Often
I think there should be a new process with these credit agencies on how an employer views a credit file. There should be a specific site that employers should log into that will only enable them to view if you have any criminal employment violations that could potentially be related to the type of position applied for. Any and all other negative credits issues should be blocked from viewing. We all know at this point in time that everyone is experiencing financial hardship with bankruptcy being the number 1 activety along with foreclosures and then credit cards payments being missed or stopped. Consumers are barely making ends meet. They only can handle the basic living expenses like the mtg (if they still have one),utilities (if they have already started paying those late too)and putting food on the table. So, why do employers still look at the credit rating it not fair to the low income families.
Source: bryanellis.com
The Heavy Consequences of Bankruptcy with Student Loans
You may not qualify for forgiveness or discharge. In this case, you have two primary ways to resolve the outstanding student debt through filing bankruptcy. The first is filing Chapter 7 Bankruptcy, which involves a liquidation of your assets. This option is used for borrowers who do not have an income to continue repaying the loans and instead must gain an income through selling possessions. All assets may be subject to sale by the court, and you will not have control over when your assets are seized or in what order your debts are repaid. Student debts are senior debts, particularly if they are federal loan debts, so they will be repaid at the highest priority.
Source: finweb.com
Consequences Of Bankruptcy
One of the consequences of bankruptcy is that if the bankrupt person wishes to buy a house in the future, there will be a two-year wait after the Chapter 7 case is discharged before he will be deemed eligible for a home loan. When a Chapter 13 bankruptcy case is involved, the wait is twenty-four months after the debts are paid off in full. During that two-year period, the loan applicant will need to have been employed steadily, have no negative entries in his credit file, and kept debt under control. If a person is able to make a large down payment of 15% to 20%, there will be no problem getting a home loan. For less than that, the interest rate will probably be high. If a borrower has to get a loan at a higher rate, two or three years of a perfect payment record may make a lower interest rate possible through refinancing. The recommendation for reestablishing credit is to establish credit with four creditors, including one or more secured credit cards. Stores and credit card companies will often allow people with bad credit histories to obtain credit from them, but the charge limits will be low, and the interest high. Another tip to improve the chances of loans after bankruptcy is to ask providers of gas heating, auto insurance, water, and phone service if they will give a clean credit reference letter to a post-bankruptcy customer after twelve months of on-time payments. Even though one of the consequences of bankruptcy is that the bankruptcy stays on one’s credit record for ten years, these other positive events are certainly going to be helpful to a person’s overall credit rating. If all of this seems tedious and time-consuming, it is. People should know ahead of time that these difficulties are the consequences of bankruptcy. Another of the loans after bankruptcy that many people are looking for is a car loan. These are not so difficult to obtain. Again, high interest will be part of the deal. However, from a credit history standpoint, higher interest is much better than “high risk.” Application for an auto loan post-bankruptcy can even be done online. The rules are simple: Applicant must be 18 years old; must make $1,400/$2,000 joint income per month; must have a valid drivers’ license; and must have or be able to obtain car insurance. One thing doesn’t change about buying a car, whether it’s before or after bankruptcy, and that is the importance of checking with different dealers to find the best possible deal on a vehicle. Consistent payment on a personal loan will be helpful in reestablishing credit. Once the bankruptcy case is discharged, personal loan options may include secured personal loans, unsecured personal loans, or lines of credit. The chances for approval will be greater if there has already been a move to boost the credit record with an excellent payback history on a credit card or auto loan. All of these things work together to prove to the lending institutions that although this person filed for bankruptcy, he can now be trusted to be on time with payments. Time and patience are absolutely necessary virtues in obtaining loans after bankruptcy. While all of the creditors who are willing to issue credit cards or charge accounts will most certainly be charging a higher interest rate to begin with, the customer who proves to be reliable over time may ask for a lower rate. Asking certainly can’t hurt, and may be a great help to one’s future buying power. These consequences after bankruptcy are annoying. Everything is predicated upon the rock-solid commitment on the part of the person with bad credit to do everything in his power to make everything right again. Rock-solid commitment is required of us in faith, as well. Scripture reminds us to trust in God, not in things. “Some trust in chariots, and some in horses: but we will remember the name of the Lord our God.” (Psalm 20:7) Quite often the reasons for a person filing a Chapter 7 or 13 in the first place had nothing to do with irresponsibility, so the consequences of bankruptcy seem harsh. A serious illness or accident, or loss of employment, can wreak havoc in a family’s budget. Keeping up with bills when income has ceased can be next to impossible, so the courts provide the only answer. In this kind of case, the individual responsible is not careless about his credit, so getting his reputation back and loans after bankruptcy will be easier than it will be for the person who just got too hooked on having more things until there was just too much to pay back. That habit is hard to break.
Source: christianet.com