Debt Lands provide impartial advice to our entire client base, helping you to make the right decision.
Bankruptcy is a very serious concern. The consequences are wide-reaching, with those who have gone bankrupt often having to sell everything they own. This means that you could easily lose your house, your car, and any other assets as you attempt to bring an end to your debt problems. Additionally any business owner made bankrupt will have to close down the business and may not be able to be a company director in the future.
Bankruptcy should be the absolute last resort when attempting to become debt free. If you see the prospect of bankruptcy looming on the horizon, you should first consider our debt advice. Hopefully, one of our alternatives to bankruptcy, such as our Debt Management Plans (DMP), Individual Voluntary Agreement (IVA), or Trust Deeds (the Scottish version of the IVA), will be a better option for you.
However, there are cases in which bankruptcy may be unavoidable. If you are unable to repay the debt in an amount of time deemed reasonable by your creditors, you may be left with very little choice.
Exactly what is bankruptcy?
Bankruptcy is a final option that often has to be considered when an individual cannot meet the payments necessary to repay their debts, or cannot reach an agreement with their creditors over payment terms. When bankrupt, your debts will be written off, but only after your assets and properties have been sold off to clear as much of the debt as possible.
Bankruptcy is a form of insolvency. To file for bankruptcy you will require a professional insolvency practitioner. Here at Debt Lands, we offer an exemplary service from a team of experienced professionals.
Is Bankruptcy similar to an Individual Voluntary Arrangement (IVA)?
Bankruptcy is in many ways similar to IVA. However, some of the consequences carry a much greater severity. Your debt will be written off, but you will be required to sell off your assets so that you can clear as much of your debt as possible.
The benefits of bankruptcy
A year after starting the bankruptcy process you will be discharged, and your involvement in the process will be over. Any debts that remain will be written off by the courts. After completing the bankruptcy process you will be debt free.
The disadvantages of bankruptcy
- The Official Receiver can sell any of your assets: this includes your family home, your car and any of your household effects.
- Subsequent to bankruptcy you will be excluded from many professions. You will not be allowed to join the Police Force or the Armed Forces, and work in Local Councils or Government Offices will be unavailable to you. Promotion prospects will also be affected.
- You will be unable to act as the director of a company.
- Your involvement in limited companies may be restricted.
- You cannot trade in any business under any other name unless you inform all concerned parties of your bankruptcy.
- There may be restrictions on you practising as an Accountant/Solicitor.
- You cannot become a Member of Parliament.
- You cannot act as a Justice of the Peace (JP) or Governor of a School.
- You cannot become a member of the Local Authority.
- The bankruptcy order remains on your credit reference file for six years.
- Any member of your family, or even your employer, could be publicly examined in court if the Official Receiver believes this will aid the investigation
- Local newspapers will print your name under the bankruptcy notices section.
- The information is also displayed in the Individual Insolvency Register (accessible on the Insolvency Service website) until three months after you are discharged.
- You may be unable to obtain credit in future, as a record of the bankruptcy order stay on your credit history for up to six years.
What is the start of the process for bankruptcy?
- The court make a bankruptcy order only after a bankruptcy petition has been presented by yourself (a debtor's petition) or by your creditor, to whom you owe more than £750 (a creditor's petition).
- You will then have to pay a fee which is taken as a deposit of the work of the official receiver.
- The bankruptcy will last for around 12 months!
Some common questions about bankruptcy
Do you need to continue to pay ongoing commitments during the bankruptcy process?
Yes. It is essential that all payment commitments are met to ensure that you do not fall into further debt problems. Mortgage, rent, and all bills must be paid.
Is Bankruptcy similar to an Individual Voluntary Arrangement (IVA)?
Yes, but the consequences can be more severe. Your debt will be written off, however, this will only happen after your assets and property have been sold to clear as much as possible.
How much will it cost to make myself bankrupt?
- The court fee of £120.00
- The Deposit of £250.00
- If High Court swear fee apply
Bankruptcy should it be last resort for people with debt problems?
Yes. Bankruptcy has severe consequences that you will hope to avoid. Unfortunately, there are sometimes no alternative options. Look at our IVAs and Debt Management Plans, but if bankruptcy is teh only option for you, we at Debt Lands are here to make the process as pain free as possible.
