Bankruptcy – what does it really mean to go bankrupt?
A Bankruptcy case is decided in court, it can be started by yourself,or one(or more) of your creditors if they are owed at least £750. Your assets (with certain exceptions) are sold to help pay your creditors. However, you can usually keep your personal belongings, the contents of your home and your tools of trade (which may include your car) unless they have a high value.
Bankruptcy – How does going bankrupt work?
If you have surplus income after meeting your essential household and personal expenses, you will have to make payments out of your income for up to 3 years. Your assets and income are dealt with by a licensed and regulated insolvency practitioner or by a government official called the official receiver.
Bankruptcy – For how long does bankruptcy last?
Bankruptcy usually lasts for 1 year, and once you have been freed (discharged) from your bankruptcy, you are released from your debts (with certain exceptions)
Bankruptcy – Pros and cons of going bankrupt
|Debts are written off, with certain exceptions explained opposite.||Your bankruptcy is entered on a public register and is advertised.|
|Creditors can’t take further action unless the debts are secured on your home or other property.||If you apply to the court for your own bankruptcy, you will have to pay a court fee of £175 and deposit of £525.|
|It allows you to make a fresh start after only a year.||You will remain liable to pay certain debts in particular student loans, fines and some debts arising from family proceeding.|
|You may be able to avoid having to sell your home if your spouse, partner or relative can buy your share of value after any debts secured on it have been paid.||Any business you have will almost certainly be closed down.|
|Your credit rating will repair eventually.||Your employment may be affected.|
|You can save the fees for bankruptcy over time with a company who will prepare your Statement of Affairs.||Certain professionals are barred from practicing if they are made bankrupt.|
|There is not maximum amount of debt which can be included in a bankruptcy.||You can’t act as a director of a company or be involved in its management unless the court agrees.|
|You will be committing an offense if you get credit of £500 or more without disclosing that you are bankrupt.|
|You may have a bankruptcy restrictions order made against you for 2 to 15 years if you act irresponsibly, recklessly or dishonestly.|