Bankruptcy
Bankruptcy is one way of dealing with debts you can’t pay but should, in most cases be a very last resort, particularly if you own a property and wish to protect it. Your assets can be used to pay your creditors and, subject to certain restrictions you are discharged from your debts after a period of time.
There may be other, more appropriate ways to deal with your debts. It is very important that you get professional debt advice so you fully understand the consequences of bankruptcy and how it can affect your home, business and credit rating as well as the different debt solutions available to you.
We provide a very personal service so you are confident you are receiving the best possible help. Our in house Insolvency Practitioner is on hand to answer any queries you may have. Please take our Debt Test to give you an idea of whether bankruptcy is the most appropriate solution to your debt problems or call us free of charge on 0800 043 2424 for advice now. You can also provide extra information so we can fully assess your situation here.
The majority want to avoid bankruptcy as its effects are financially crippling not only for the period of the bankruptcy but far beyond in the terms of credit rating.
In most bankruptcy cases where there is a house with equity, that equity has to be realised. This could mean that either your spouse or partner has to purchase your interest or it has to be sold, adding a burden to your personal relationship.
In some cases bankruptcy may well be the best advice but the IVA was introduced as an alternative to bankruptcy by The Insolvency Act 1986.
Bankruptcy brings with it certain restrictions. Your situation is advertised in local newspapers, bank accounts and credit cards will be closed, in certain professions there is a risk of losing your job, and you will not be able to run a business or hold public office during the bankruptcy. There are a number of careers where bankruptcy is not an option such as but not limited to Company Directors, armed forces personnel, army, navy and Royal Air force as these people would be unable to continue their careers. In these careers a suitable alternative is essential and an IVA is likely to be the most appropriate.
Providing you have not been made bankrupt before, your bankruptcy will end (you will be ‘discharged’) after 12 months, after which you will be free from debt and no further action can be brought by your creditors, although you may still have to make payments from your income for a further 3 years.
X-debt’s best advice model will give you a fair assessment of the options open to you. There may be a better debt solution than bankruptcy - see how an IVA can help if you or your partner owe more than £15,000 and either of you are in regular employment.
Please take our Debt Test to see which option may be most suitable.