Can Bankruptcy Hurt You as a Trader?

mbay · Oct 30, 2006

Seriously, I am in no way contemplating about bankruptcy.

(Discover I will send you a payment soon

)

Seriously, if you go in debt from trading is the best solution to work your way out of it or just declare bankruptcy.

Assume no responsibilities like no family and assume no real assets.

The answer seems like an obvious yes, but is it?

I was just reminiscing

Drew07 · Oct 30, 2006

Do you mean work your way out of it by trading, or getting a "real job" to pay off your debt?
(I'd like to congratulate myself on my 100th post)

mbay · Oct 30, 2006

Quote from Drew07:

Do you mean work your way out of it by trading, or getting a "real job" to pay off your debt?
(I'd like to congratulate myself on my 100th post)

Bah 100th post, congrats...

I never thought about that, I would assume real job.

Maverick74 · Oct 30, 2006

Quote from mbay:

Seriously, I am in no way contemplating about bankruptcy.

(Discover I will send you a payment soon )

Seriously, if you go in debt from trading is the best solution to work your way out of it or just declare bankruptcy.

Assume no responsibilities like no family and assume no real assets.

The answer seems like an obvious yes, but is it?

I was just reminiscing

We are now doing credit checks on all our new traders. So yes, declaring bankruptcy is going to pretty much kill any chances of becoming a professional trader or even being hired to work in the financial industry. Don't do it. Bankruptcy is almost never the best solution.

eagle488 · Oct 30, 2006

Some of the richest and most sucessful men have declared bankruptcy at one time, like Donald Trump. The experience made them better men.

However, a big red x will be painted on your forehead for about 10 years which I believe is the time it takes to wash off your credit report. You will have to explain it to anyone who decides to run a credit report on yourself. Obtaining a mortgage, buying/leasing a car or renting an apartment will prove more difficult. Even getting a job as a clerk at the local retail store will be difficult as they will run your credit report too.

So if you want the big red x painted on your forehead for 10 years where you will find yourself being turned down for jobs and loans or at least have to draft an essay on the reasons why you declared bankruptcy, then its definately an option.

indahook · Oct 30, 2006

Quote from Maverick74:

We are now doing credit checks on all our new traders. So yes, declaring bankruptcy is going to pretty much kill any chances of becoming a professional trader or even being hired to work in the financial industry. Don't do it. Bankruptcy is almost never the best solution.

Dont you run a prop shop? Why would you care about someones solvency issues from the past? Plop down the required dough and trade away, right?

If I were an employer I would ask why you did it. Ch7-11 is called the last resort for a reason. Bad things can happen to good people.

volente_00 · Oct 30, 2006

Quote from indahook:

Why would you care about someones solvency issues from the past? Plop down the required dough and trade away, right?

Because people are creatures of habit and more often than not resort back to old ways.

But I agree, if there is money put up front for risk it should not really matter as long as risk control is doing their job.

The OP makes it seems that he will seek BK if he runs up debt incurred from trading. If this is your mentality you need to stop trading because you will not make it being a pessimist before you even start.

volente_00 · Oct 30, 2006

Quote from Maverick74:

We are now doing credit checks on all our new traders. So yes, declaring bankruptcy is going to pretty much kill any chances of becoming a professional trader or even being hired to work in the financial industry. Don't do it. Bankruptcy is almost never the best solution.

So if a trader showed up who was profitable and had audited statements but had filed a chp 7 because of a nasty divorce a few years back you would automatically X them ?

indahook · Oct 30, 2006

Quote from volente_00:

Because people are creatures of habit and more often than not resort back to old ways.

.

Thats true. I know a guy who owns mortgage brokerage. So he gets to see all of his clients full financial past. He claims that about half of folks with declared BK or horrible credit history had done it more than once.

That still leaves a good portion of folks who may have had bad luck. Unemployed, divorce, lawsuit, medical bills..etc.

Pa(b)st Prime · Oct 30, 2006

Quote from mbay:

Assume no responsibilities like no family and assume no real assets.

The answer seems like an obvious yes, but is it?

I was just reminiscing

There's no compelling reason to go BK unless you're seeking the protection of assets.

Creditors know they can't get blood out of a stone. Even the IRS is hip to being stiffed by folks who are broke. The G is the most sympathetic creditor there is. But if you got dough those you owe are going to get it unless you do a tremendous job of segregating business debt from personal liability.