Consequences of insolvency
Insolvency hurts you in the present and in the future. With cash-flow insolvency, if your search for liquidity prompts you to miss due payments, you will have to pay late-payment interest. With balance-sheet insolvency, even if you sell off assets, your credit history (which consists of your debts and defaults) will be damaged. This will make it harder for you to get credit, loans and other financial products and services in the future.
Insolvency can become a criminal offence if the law is broken in order to avoid debt repayment. Bankruptcy fraud includes concealing assets to avoid using them to pay a debt or falsifying documents to cover up your finances In some countries, bankruptcy fraud carries fines or even jail time.
Poor financial planning and debt scheduling can harm your financial health in many ways. Keep your income and expenses balanced in order to save money, invest, increase business revenue and meet other financial goals.
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June 05, 2023 at 02:12PM
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Insolvency: What it is and how to avoid it - Santander
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