Bankruptcy
Bankruptcy
Bankruptcy is a legal debt management solution available to individuals and businesses facing overwhelming financial difficulties. It is a formal process that involves declaring oneself or being declared insolvent by a court. Bankruptcy offers a fresh start by liquidating assets, if necessary, to repay creditors or by setting up a repayment plan based on the individual’s financial situation. It provides relief from creditor actions and offers the opportunity to discharge eligible debts.
However, bankruptcy has long-term consequences, including potential impact on creditworthiness and certain restrictions on financial activities. It is a serious decision that should be carefully considered with the guidance of a licensed insolvency practitioner or legal professional.
Other people can put you into bankruptcy or you can make this choice yourself. It’s something to be carefully considered.
The three ways you can go bankrupt are:
- You apply for bankruptcy yourself
- An application for bankruptcy from a creditor
- By the IVA Supervisor if you fail to meet the terms of your IVA.
Pros
Your Bankruptcy could be discharged within 12 months.
It can free you from the pressure from creditors.
All debts that qualify for bankruptcy are written off.
The stigma of bankruptcy is not what it once was.
The process to make yourself bankrupt is now completed online.
Cons
You lose control of finances and assets, the official receiver or Trustee appointed on your case will decide what happens to your valuable asset and finances. Your information will be held on a public register.
Putting yourself into bankruptcy will cost £680, this can be paid in monthly instalments however you will not be afforded the protection of bankruptcy until such time as this is paid.
Under certain circumstances, bankruptcy can affect types of employment.
Depending on if you have proven disposable income and employment status, you may have to pay income payments for up to thirty-six months.
It will affect your credit file for six years.