Ultimately, the cost of bankruptcy is passed down to the people who pay their bills and are responsible through higher interest rates, credit charges, and higher taxes.

Question

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When individuals or businesses file for bankruptcy, financial institutions and businesses often incur losses. To compensate for these losses, they may increase interest rates, credit charges, and fees. Additionally, if public funds are used in bailouts or to cover unpaid taxes, this can lead to higher taxes. Thus, indirectly, responsible payers bear some of the financial burden of bankruptcies through these increased costs.

Ultimately, the Cost of Bankruptcy Is Passed Down to the People