Bankruptcy is a severe last resort if you are in serious debt and no other debt solutions, such as an IVA (Individual Voluntary Arrangement) or Debt Management Plan can save you from going bankrupt. Bankruptcy protects you from people you owe money to and allows you to start afresh, but you need to think very carefully about all the implications it will have.
Subject to certain exemptions, bankruptcy means your assets are sold off and the money used to pay people you owe money to. Assets could include life insurance and pensions. You would probably have to sell your house.
Call us free on 0800 083 1433 to find out more.
If you are calling from a mobile just let us know and we will call you straight back.
Bankruptcy restrictions
If you go bankrupt, your situation is advertised in your local newspaper. The restrictions you will face include having bank accounts and credit cards closed. Your landlord will be informed and, for certain professions, you run the risk of losing your job.
Best Advice Model
Our Best Advice Model is designed to give you a fair assessment of the choices open to you. There may be a better debt solution than bankruptcy - for example, an IVA, Debt Consolidation or Debt Management. If you or your partner owe more than £15,000 and either of you are in regular employment, then an IVA could well be an option. Call us today for debt advice about IVAs and other debt solutions.
Call us free on 0800 083 1433. Our phone lines are open 8:00 am to 9:00 pm Monday to Friday, 9:00 am to 5:00 pm on Saturday and 10:00 am to 4:00 pm on Sunday. You can call free for an initial chat about your own financial situation.
If you are calling from a mobile just let us know and we will call you straight back.
More about bankruptcy
Bankruptcy is a way of enabling those in debt to wipe the slate clean and start over again. How it is not without serious consequences and as the most serious and final of all the debt solutions on offer, should only be chosen once you have had debt advice you trust.
Since the 1 April 2004, the Bankruptcy laws in England have changed considerably to enable more people get rid themselves of the burden of their debt. For example, previously, bankruptcy would last 2 – 3 years. Now most bankruptcies get discharged in only 12 months. So why are there not more bankruptcies?
Part of becoming bankrupt involves telling you bank and landlord of your position and an advertisement being placed in your local and national newspapers. As such, it is the least discreet of all the available debt solutions.
In addition to the public nature of bankruptcy, all bank accounts, credit cards, and store cards are cancelled and leased goods returned. And for many the worst of all, your home may be taken from you.
So what are the alternatives to Bankruptcy?
An IVA or Individual Voluntary Arrangement - where a formal and legally binding agreement is created and managed by an Insolvency Practitioner that outlines what amount you can afford to pay back to people you owe money to and over what period. If accepted by people you owe money to, you'll be looking at paying a much smaller total amount of debt off over what is normally 5 years. What is more, your home is protected and the IVA is kept a private affair.
Debt Management Plans - where through an informal arrangement between you and people you owe money to, you pay back the whole debt over an agreed period of time.
Re-mortgaging, or in other words, borrowing against the equity in your property to pay back your debt.
And finally, consolidation loans. Which as you would imagine, is a loan that is taken out to pay back your other debts.
Each of the above is an alternative to Bankruptcy. The choice of which is right for you should be made in partnership with a debt advice specialist. Debt Free Direct are the UK's leading debt help company and are the UK's largest IVA provider. Our advice is based on our 'best advice model' and does not favour any one solution, and is based purely on what is debt solution is best for you and most likely to help you become debt free.
