Personal Bankruptcy and Financial Literacy - Essay Example

The management of the companies should know the implications of the finance to be a successful player in the market. On of the most important measures in the development of the companies is the profit of the company. Therefore, it is imperative for the business to be financially literate. It has become an important subject at individual level after the recession. One of the most important components in the economy is the financial market. Financial Education is needed for the individuals and the organizations in the world to understand the concepts and rationales behind the financial products in the market.

They also require recognizing the risks involved with the products so that they can leverage the risk when required. Financial education engulfs education about the financial products and the economy with the help of the charts and the data analysis, which help the companies and the individuals to analyze the market more carefully. (OECD, 26-27). This leads to the development of the economy in general. The individuals and the companies can take the advantage of a situation in the economy if they are well acquainted with the financial education.

After the recession, a major trend in the market was the bankruptcy. The bankruptcy for a company or an individual is a condition when the person or the company is unable to pay the debts. The regulatory authority of the country gives the company or the individual the support to pay off the debts by taking over the assets. (Blum, 337). The importance of bankruptcy has increased in the aftermath of the recession as many companies and individuals took the shelter of the law, as they were unable to pay off the debts.

The bankruptcy has a negative effect on the economy of the country in the case of the companies. The companies provide many individuals with jobs and with the closure the unemployment problem rise. However, in the case of the individuals, the bankruptcy