If you're facing bankruptcy your own research into this debt solution can bring up mixed results. The text-book dialogue provided by some debt advice centres isn't catered to your individual situation and circumstances; advocates of other debt solutions may have a biased opinion; and the internet is riddled with distorted facts concerning bankruptcy.
You do have options, and bankruptcy isn't the only one, but it is your right to know the facts surrounding bankruptcy so that you can make an informed decision.
Those who benefit from entering the protection of a Bankruptcy Order:
People with no assets,
People living in either rented accommodation or with friends and family,
Those whose livelihoods would not be lost or affected by being protected by Bankruptcy
Advantages
All of your pre-existing debt is wiped off.
Creditors can no longer hassle you.
First-time bankrupts are usually discharged within 12 months (sometimes sooner).
If you rent or live with parents you don't risk losing your home.
You can keep tools of your trade.
You can keep a car worth £2500 or less.
You have the chance to rebuild your credit rating once discharged.
You can get your finances back on track.
Disadvantages
You lose control of your assets (house, savings, expensive car (over £2500)
You cannot obtain credit for over £500 without the declaring that you are bankrupt..
You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
Occupations affected
You cannot act as a company director.
You may not practice as a Charted Accountant / Lawyer.
You may not act as a Justice of the peace (JP).
You may not become an member of parliament.
You may not become a member of the local authority.
It could be that bankruptcy is the most suitable debt solution for you.
You may hear that bankruptcy should be considered a last resort, and that you should try an IVA (Individual Voluntary Arrangement), IPP (Informal Payment Plan) or DMP (Debt Management Plan) first, but this isn't always suitable. What's right for you depends entirely on your circumstances as these are all solutions to the same problem, but tackled differently.
You may find that you would benefit from professional help in completing your Statement of Affairs and Bankruptcy Petition.
From the time that you decide to apply for a bankruptcy order, to the day that you are declared bankrupt, you may seek assistance in order to keep your creditors and bailiffs at bay. In addition, performing your own research into bankruptcy often results in receiving conflicting information, depending on the source(s).
Personal bankruptcy for Scottish residents is called Sequestration.
To be sequestrated you must owe at least £1,500 and either: one or more of your creditors must have taken you to court to enforce or demand you repay a debt or you must have been on a debt payment programme under DAS that has been revoked and one of the creditors in the DPP have been to court and obtained a decree on one of the debts.
You are immediately free from debt and will not be responsible for any of your pre-existing debts.
It is a fresh start for you and your family to start again and build yourself up from a position of strength. You are immediately protected from all your creditors who form part of your bankruptcy.
Clear Insolvency is trading name of Hamilton and Clarke Ltd.
Registered in the UK. Company no. 6465374. Consumer Credit License (UK) 612841
Clear Insolvency, 27 Old Gloucester Street, London, WC1N 3AX
