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Bankruptcy
What is Bankruptcy?
Bankruptcy occurs when your liabilities are greater than your assets; basically when you cannot pay your debts as and when they fall due. There are three ways to be made bankrupt. You can apply to be made bankrupt yourself, known as Voluntary bankruptcy, a company that you owe at least £750 to can make you bankrupt, known as involuntary bankruptcy or you can be made bankrupt by the supervisor of an IVA or the Trustee of a Trust Deed.
What are the benefits of Bankruptcy?
- No longer have to deal with creditors
- Usually automatically discharged after one year
What are the disadvantages of Bankruptcy?
- Social stigma – your name will be published in the local newspaper
- Your credit file will be impaired for many years
- You lose control of your assets including your home
- You cannot act as a company director
- You cannot work in certain public positions
- You cannot obtain credit of more than £250 without permission
Bankruptcy is an option that should only be considered as a last resort. You should always seek expert advice before considering declaring yourself bankrupt.
What to do next?
Do not rush into bankruptcy, this is the last report. Speak to an expert and understand your options before committing. Before proceeding with any solution you need to ensure that you have fully explored and understand all of the options available to you. Moneyextra can help. If, after reading this guide you have decided that an Individual Voluntary Arrangement is the most appropriate solution for you then speak to a trained Moneyextra’s adviser today on 0800 988 9323 or via Live Chat or take the Debt Test
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