It seems that the biggest problem with filing for bankruptcy is that you wouldn’t be able to get any credit. However, some banks are actually pursuing people who have recently filed for bankruptcy. Why? When you file for personal bankruptcy, for example Chapter 7 Bankruptcy, you can’t file again for many years, so you’ll have to find ways to pay your bills. Secondly, those who have filed for bankruptcy have shown a propensity to run up high bills and not pay them off in full, which means interest charges will start to pile up.

The social and psychological effects are far more serious. A bankrupt person looses his/her previous reputation, and has to declare the fact of bankruptcy whenever s/he tries to initiate a new business, apply for a new job, or simply ask for financial assistance.

Effects on your business and financial situations:

	While being in the process of bankruptcy, you will still have the duty to pay all the tax and VAT returns. You will also have to keep an up to date accountancy of your affairs and hand it over to the officials whenever you are asked to do so.
	You won’t be able to conduct or be involved in any kind of business (direct, indirect) without the Court’s permission.
	You cannot apply for any further credit without informing your previous lender
	Whenever you want to open a new business you have to declare your bankruptcy, and accordingly, accept the restrictions
	Your bank account will be closed, so you will have to find another way to receive your salary and/or pay your bills.
	Employment restrictions: it will be very difficult to find a new job, and some workplaces immediately exclude bankrupts’ applications.
	Further financial burdens: the income payment agreement usually requires you to make contributions towards your debts and costs, for a certain period of time. This, of course, depends on your income and the way you spend your earnings, which may be regularly monitored at various stages in the bankruptcy process.

Psychological effects:

	When being bankrupt, you might feel helpless and out of control, but never let your desperate state of mind influence your decisions. Never ask for the help of unscrupulous lenders, but try to seek for professional advice.
	Don’t forget that there is always a solution to your problems: the so called bankruptcy mortgages can consolidate your debts. Shop around for this kind of service, and be informed about its advantages and disadvantages.

What can you do?

Ask for advice! There are specialized agencies that provide you a package of advice and solutions. It is essential to consult the service of such an agency, even before starting a business. Bankruptcy advisors usually have to highlight all measures of prevention, and when the inevitable occurs, they will make sure if bankruptcy is the best option. They should explain to you clearly all the stages and steps of the bankruptcy process and should tell you all the possible outcomes and problems you have to face. Even if you have to pay for bankruptcy advice, it is a service which will be of great help, as it can prepare you for many situations: how to protect yourself against claims on your assets or how to deal with accusations against you while your bankruptcy case is investigated. There is another method to get advice: you can visit online forums and talk to people to see the different ways of dealing with this problem, but be careful, because every bankruptcy is a special, personal case, and what you really need is professional advice.

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