What is Bankruptcy?
Bankruptcy is one way of dealing with debts that you cannot pay. Bankruptcy proceedings eventually free you from overwhelming debts, however any assets that you have may be sold and the proceeds shared amongst your creditors. Bankruptcy lasts for twelve months, after which time you can make a fresh start.
What are the effects of Bankruptcy?
- You will have to report to the Official Receiver and provide him with details of your financial affairs
- The Official Receiver will effectively own all your assets and look to realise their value for the benefit of creditors
- You will usually have to close your bank account
- You are unable to obtain credit exceeding £500 without disclosing your bankruptcy
- The Bankruptcy Order is registered with credit reference agencies for at least six years
- Your employment may be affected depending upon what job you do
- You cannot be a company director or hold public office
What are the alternatives to Bankruptcy?
- Individual Voluntary Arrangements
- Debt Management Plans Final Settlements