Filing for bankruptcy normally provides an immediate relief in the form of stay on demands and threats of the creditors and discharge of the loans as well. However, beyond to the knowledge of almost everybody, bankruptcy may cause some deep effect to his or her assets and credibility as a debtor.
Bankruptcy may lead to loss of the debtors valuable assets like his or her house or car, which is obviously a basic need. Included in the effects of filing a bankruptcy is the losing of control over his or her assets. These will now the taken over by the trustees of the official receiver and the presiding magistrate, once the bankruptcy proceedings are initiated. After the assets are taken over, you may now have a hard time rebuilding those once those assets are already liquidated for disbursements to the lenders.
Aside from the losing of controls over his or her assets, another sad effect of filing for bankruptcy is the losing of the debtor’s financial credibility. Once the financial credibility will be ruined by filing for a bankruptcy, it cannot be easily regained even after years of efforts. Included in this effect will be the drastic lowering of credit records and the bearing of the bankruptcy evidence for up to ten years. Even if the debtor will do some repayment plan, it will not remove his or her bad credit history.
The Fair Credit Reporting Act said that the credit assessing agencies has the ability to keep a record of your credit untrustworthiness for as long as seven years. In addition, creditors normally continues to report to the credit rating agencies all the information about any accounts that are maintained through a debt repayment plan. If one misses or delay to any payment, all of it are duly reported even because of a serious difficulties. Because of these reports made by the creditors, it will now be hard or even difficult for a debtor to get a mortgage or any other credit like card or loan for the coming years. If ever there will be a chance for the debtor to be successful in getting a loan, it will definitely be on a high interest rate. In addition, the loans might be accompanied with some stringent conditions.
If somebody thinks that filing for bankruptcy will save him or her, yes maybe for the moment. However, the embarrassment and stigma it brings will take years to eradicate. The bankruptcy can be read in the national newspapers and recorded with credit rating agencies. If the borrower who filed for bankruptcy is a tenant, his or her property owner will be informed.
Moreover, a bankrupt person’s employment might also be affected because employers are reluctant to offer jobs to the bankrupt person even though law for discrimination reasons is prohibiting it. Employers immediate thinking is that a bankrupt person cannot be a director of a business firms.
With the effects mentioned above, there is no doubt that bankruptcy should be avoided. And to do this, you must have the control over your financials and avoid spending beyond what you can afford.
Almost everybody thinks that putting up a business during downturn is a bad time to do some business. However, if all of us would think this way, nothing will really happen. Take into consideration the risky decisions these businesspersons had made during market downturns.
With P&G or Procter and Gamble, which has been founded during the panic of 1837, candle maker William Procter and soap maker, James Gamble joined to form a small partnership that is into household goods business in Cincinnati. If you got to see of their status today, Procter and Gamble has created a name in the market with some of their renowned brands in the United States, which includes Tide, Pampers, Oral-B, Lams, Pantene, Duracell and Pringles.
Next in line is the now called IBM, During the long economy depression on 1873-1896 three companies has started up their businesses: the Tabulating Machine Company, The International Time Recording Company, and the Computing Scale Corporation. Three of them have developed technologies on this 23-year period of sour economy. However, despite of the situation, their product was in-demand. Moreover, it was in 1911 that these three companies has merged and changed their name to IBM. Recently, IBM had posted a strong quarter, which has attributed to an increased demand for its outsourcing services.
Another company founded during an economic crisis is the General Electric, which was founded during the panic days of 1873. Thomas Edison set up a facility in Menlo Park, N.J., in 1876, and produced his first light bulb in 1879. Even though the market remains poor until 1896, Edison had gained enough courage to start a company he called Edison General Electric Company. To date, GE had reported $183 billion revenue, but it is down by 19percent.
During the panic of 1907, leading horse-drawn vehicle manufacturer William Durant was not discourage with the situation and started his luck with on a new technology called the automobile and founded General Motors on September 16, 1908. With the current economic condition of today, GM has seen its stock prices drops by 85 percent in a year. In December, GM together with Chrysler and Ford went to Washington to seek $34 billion in government loans.
The United Technologies Corporation is another one of the six companies that was born during economic downturns when the times wherein almost all industries struggle under the financial crisis. However, despite of that, the Golden Age of aviation was in full swing, and in 1934 the then United Aircraft changed its name and is now known as the UTC. In 2008, UTC reported $58.7 billion of revenue. However, orders are slower for products like elevators and air conditioners, and since they own the Otis Elevator and Carrier Corporation.
Incorporated by entrepreneur Frederick W. Smith in 1971, Federal Express began operation during the oil crisis in 1973 from Memphis International Airport and had shipped 186 packages to 25 U.S. cities on its first night of operation. To date, FedEx CEO Frederick Smith took a 25 percent pay cut for 2009 as part of its sweeping cost-cutting plan. fela lawyers | debt relief |
Car top sellers General Motors, Ford Motors, and Toyota Motors had experienced a drastic change in their sales to the worst in 26 years. In January, auto sales has fall down by 38 percent, which came out to be more than expected to their worst levels since 1982.
As with General Motors, they had reported that its sales was down by 49 percent from a year ago. Ford motor on the other hand said that their sales fall down at 39 percent for it Ford Lincoln, and Mercury brands. However, if they are to include their sales on Volvo their sales have fallen 40 percent. In addition, Chrysler LLC had reported of their 55 percent down in sales.
Nevertheless, it is not just the US automakers tumbled sales. Other automakers like Toyota, Honda, and Nissan also have encountered the same problem as the US automakers do. US sales of Toyota have slowed down to 32 percent, while Honda sales decreases by 28 percent and Nissan had tumbled down to 30 percent.
Edmunds.com, sales tracker had did a forecast and the result turns out to be even worse that forecasted. Edmunds.com forecasts include GM sales to tumble around 38 percent, Ford around 30 percent and Chrysler to drop by 48 percent. It also had a forecast for Toyota to drop by 25 percent, Honda at 23 percent, and Nissan by 28 percent.
According to another sales tracker Autodata, the seasonally adjusted annual sales rate, or SAAR had fell to 9.6 million, which is at 15.4 million earlier. In more than 26 years, this is the first time that auto sales drops below the 10 million mark. Mike DioDiovanni, the director of sales analysis of GM said that January will mark the as the first month on record that auto sales in the United States trail sales in China.
GM said that its fleet sales tumbled 80 percent in the month, which means sales of only 1,000 cars out of 12,000 fleet sales that went to rental companies. US carmaker Chrysler reported a drop in fleet sales of 81 percent and 65 percent decrease in fleet sales for Ford this January.
Chrysler on the other has moved away from fleet sales to focus on sales to consumers, which is more profitable. According to Jim Press, the Vice Chairman of Chrysler, “It is better to shut plant capacity than to keep them running to supply the rental industry”.
However, not the fleet sales alone are slowing down and suffering the pain. Retail sales also had stumbled along with the fleet sales. With GM, they reported a 38 percent decrease in retail sales, Chrysler drop at 35 percent, and Ford had 27 percent decrease.
Sales are not expected to get back in the coming months as long as there are so many worries about job losses and with the overall economy. With the current economic condition, many would rather hold on to their old cars than to buy a new one. Many of the consumers have realized that what they right now is good enough until the dust settles. power inverters |
