What are some of the legal issues in declaring bankruptcy?

  1. mxmovies profile image59
    mxmoviesposted 17 months ago

    What are some of the legal issues in declaring bankruptcy?

    If I declare that I am bankrupt, how will this affect me in the future for getting jobs? building a company? etc. Also curious as to the different types of bankruptcy. Thanks!

  2. junkseller profile image87
    junksellerposted 17 months ago

    Bankruptcy will stay on your record for 7-10 years (depending on type), so employers will be able to see that if they do a credit check on you. Theoretically, public employers aren't supposed to factor that into their decision, but unless they specifically say that is the reason for not hiring you (which they won't) it is pretty difficult to prove (even if you would want to).

    Whether or not a company would hold that against you is hard to say. Some companies will probably be more likely to (e.g. financial companies or positions where you would be handling money). If you have a good explanation for the bankruptcy and are forthright about it, I think that would work in your favor.

    Building a company might be tough. Bankruptcy, generally, is not going to leave your credit score looking very pretty, so any endeavor involving credit will be more difficult (but probably not impossible).

    Rather then try to explain it, here is a link describing the different types of bankruptcies: http://www.ms-bankruptcy.com/bankruptcy … ifferences

    I went through a bankruptcy about a year ago. I was dreading it, but my lawyer made it super easy and very thoroughly explained everything to me. I think a lot of bankruptcy lawyers will do a free consultation to see if you are a good candidate and explain to you the process and implications. I would strongly encourage you to go see one of these individuals. It is much less painless then it seems.

    One thing to keep in mind is that it takes a certain amount of time for the bankruptcy to be complete (or at least it did for me). I first talked to the lawyer early December and the discharge came through in late May. It probably could have gone a little faster but not much.

    Good luck.

  3. tamarawilhite profile image92
    tamarawilhiteposted 17 months ago

    1. You can't eliminate tax debt, federally backed student loans or child support through bankruptcy.
    2. You won't be able to get a security clearance for 7 years.
    3. It will limit your ability to get any job handling cash or anyone's personally identifiable information (any opportunity for identity theft).
    4. You can save up money and start your own business, but you won't be able to get a business loan short of a loan shark for years.