Bankruptcy Information
Bankruptcy is a serious matter and one should always seek Bankruptcy advice before considering it. It will mean you giving up certain possessions of value you own including your home. If you own a business it may need to be closed which could put you and your staff out of employment. Bankruptcy is just one way of dealing with your debts and it should always be considered only as the last resort as it has such long lasting implications.
A Bankruptcy petition will be submitted either by yourself or by one of your creditors, with whom you owe over £750 of unsecured debt. Your Bankruptcy case information will then be reviewed by a court. After Bankruptcy has been declared, you will have certain legal restrictions placed upon you that will affect your ability to gain credit. When an individual cannot pay their debts Bankruptcy is an option that often has to be considered. Generally, a first time bankrupt will receive their discharge one year after the date of the Bankruptcy order.
Bankruptcy pros and cons should always be considered when dealing with cases of insolvency (listed below); however it is the last resort when all other options have been looked at. When faced with Bankruptcy, other options such as Individual Voluntary Arrangement procedures (IVA) or a Debt Management Plan could often be a better option.
Advantages
- Although restrictions apply it can free you from your debts.
- Alleviates the stress from dealing with multiple creditors.
Disadvantages
- You lose control over your assets, including any equity you may have in your home.
- If you own your own business you may need to close down, leaving you and your staff unemployed.
- You will not be able to obtain any credit of more than £250.
- Debts such as student loan, child support payments, cannot be written off.
There are different Bankruptcy and insolvency procedures for dealing with individuals, companies and for partnerships.