Friday, November 12, 2010

Additional Notes on Bankruptcy Affecting Your Credit Score


As a follow up to my previous piece, I wanted to provide more information on a bankruptcy's effect on your credit score.  Your credit score is only affected by Chapter 7 and Chapter 13 personal bankruptcies.  If your company is involved in a Chapter 7 or Chapter 11 corporate bankruptcy, it will not affect your credit at all--it will only affect that of your corporation.

This is the reason why people who are self-employed often incorporate.  It is best to keep your personal finances separate from your company finances.  Often, people pay themselves a salary under their own corporation so that if something happens to the company, that will be hurt but not personal credit.

Ultimately, bankruptcy is something to avoid on a personal level, but on a corporate level, it happens everyday.

75 comments:

  1. Ah yeah, that makes sense why people would keep personal and self-owned company finances separate.

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  2. Wow i did not know that it happens to corporations every day

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  3. that's why you should transfer your assets into something solid, like gold.

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  4. hell yes, if you are self-employed you must incorporate, or face the wrath of your companies creditors diving deep into your personal finances!

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  5. Thank god Im not on a corporate level ;-)

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  6. Are you not disbarred from holding directorships for a period after corporate bankruptcy?

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  7. great information on bankruptcy! cant wait for more!

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  8. I understand incorporating a little more now, guess it makes sense to be safe from messing up your personal credit

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  9. Bankruptcy is a horribel thing to go through

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  10. If only we all had a corporation to fall back on in case of bankruptcy

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  11. That's a smart move, incorporating your own business. No wonder I see so many corporations around.

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  12. bankruptcy is not a wise choice

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  13. Don't get in debt and pay your bills on time and you won't end up with bankruptcy!

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  14. i honestly dont get all these ppl posting about bankruptcy..is ther something u know that i should know about in the upcoming future?

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  15. Wow! Didn't know that. Interesting.

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  16. thats really interesting to know!thanks for sharing

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  17. wait there is also chapter 13??what the hell? back to wiki

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  18. Hm, makes sense, that's pretty smart.

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  19. hey, that's some pretty useful info.

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  20. Good post, stuff I didn't know.

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  21. I never realized incorporating was a way to dodge personal bankruptcy. Incorporating can be expensive itself though.

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  22. Bankruptcy is incredibly difficult to recover from. I know a few friends that are trying to bounce back, and it's been hard for them.

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  23. I'm wondering how many companies have filed bankruptcy in the past couple of years...

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  24. I'm surprised, that if a business you own files for bankruptcy that it doesn't affect you...Thats good and all I'm just surprised.

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  25. thanks, hope i never need this info tho!

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  26. Ah, thats handy to knwo if I ever consider going into private practice.

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  27. "It is best to keep your personal finances separate from your company finances"

    So true, really good tip.

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  28. Yeah, you typically want to avoid bankruptcy.

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  29. Hopefully, with all the reading I've been doing, I DONT GO BANKRUPT. lol

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  30. Wow, nice information. Good way to keep yourself safe, splitting everything up.

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  31. bankruptcy was always and will always be there.. sad story

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  32. you're doing a great work with your blog. keep it up

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  33. man those notes were a lot more important than you think

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  34. idd, companies go bankrupt everyday

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