Disadvantages Of Bankruptcy

Disadvantages of Bankruptcy

There are many long term disadvantages associated with Bankruptcy which need to be considered before you make your final decision.

That's not to say it is not the right choice for many people with serious debt problems, it often is, especially if you aren't a homeowner or don't have any assets.

If you are considering going bankrupt, it's important that you find out exactly how it will effect you and the impact it will have on your life.

Bankruptcy Disadvantages:

• All available assets will be sold to your creditors in order to meet your unsecured debt commitments, including your home and possibly your car. Only those which are required for a basic standard of living will remain.
• If you live in rented accommodation and are behind on your payments, your bankrupt status may mean that your landlord can commence a possession action of their property.
• Any spare income will be paid to your creditors.

Free Online Bankruptcy Assessment

Check now

Use our Free Online Bankruptcy Assessment to see if you qualify and how Bankruptcy will effect you.

• It may hinder your future career prospects. For example, bankrupts cannot become company directors. Whilst this may not apply to you, you need to seek expert advice and refer to your contract of employment.
• There are a number of professions including the Post Office that will not employ bankrupts for some jobs; i.e. you cannot be a postman handling mail that may contain cheques. Additionally you cannot be in the armed forces or the police force. Certain other professions such as the legal and accountancy professions also impose restrictions on bankrupts.
• Your credit rating will take years to rebuild, as the bankruptcy order will remain on your credit file for six years. Thus you may not be eligible to open a new bank or building society once you have faced Bankruptcy.
• If you wish to gain credit in excess of £500 then you must declare that you have been made bankrupt.
• Bankruptcy details may be advertised in your local paper and can be viewed online at the Insolvency Service website.
• Certain debts cannot be written off, such as fines, maintenance or child support, personal injury debt and fraud.

Bankruptcy Advice

Making yourself bankrupt is a big step to take and requires expert debt advice.

If you haven't already received advice from us and are considering how to go bankrupt, you can use our online bankruptcy test tool, which will provide you with a a free assessment of whether you qualify for bankruptcy and what impact it will have on your current situation. We'll also send you our "Free Guide to Bankruptcy" by email.

Avoid the Disadvantages of Bankruptcy:

As you can see, there are many disadvantages of bankruptcy that cannot be avoided.

N.B. Are you sure declaring bankruptcy is the only option, there are alternatives?

• IVA - Government introduced IVA legislation as an alternative to Bankruptcy. Your Bankruptcy debt can be written off and you keep control of your assets. Losing control of your finances and possibly your home are some of the worst disadvantages of Bankruptcy.
  
  
• Trust Deed - Often referred to as an IVA for Scotland. A Trust Deed can write off unaffordable debt, but the terms vary from an IVA.
  
  
• Debt Management - An informal debt repayment scheme where we can arrange a lower monthly payment to your creditors. Your debt cannot be written off but creditors are sometimes willing to freeze additional interest or charges.

What to do if your prepayment meter has run out of credit

• by Admin
• June 23, 2015

This guide explains what you should do if your pre-payment meter for gas or electricity runs out of credit....

Read

How To Deal With Debt Collectors

• by Admin
• June 22, 2015

Have you received a letter or call from a debt collection agency. In this guide we'll expain how to deal with debt collectors...

Read

A Guide To An Attachment of Earnings Order

• by Admin
• June 23, 2015

Have you received a letter threatening an attachment of earnings. In this guide we explore what an attachment of earnings order is, how they work and how to defend...

Read