The truth about bankruptcy
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Do you understand the restrictions of bankruptcy? Read on to find out what would be expected of you if you went down this route.
The decision whether or not to go bankrupt is a big one. That’s why it’s essential to do your research before you go ahead with this debt solution. Bankruptcy normally lasts for twelve months before you are discharged, and during those months there are certain restrictions that you have to adhere to. The restrictions are just the rules that you have to live by while the bankruptcy is ongoing. They make sure that everything is done by the book.
Remember, all debt solutions come with up and down sides, so it's important you know what it is you're getting yourself into before decideding on anything. We'd advise that you speak to a trained debt advsior, like ours, or those at the Money Advice Service.
In this two part blog we’ll look at the situation you’d have to be in for bankruptcy to be right for you, and then we’ll move on to the restrictions you’d be under if you went ahead with the solution.
Am I eligible for bankruptcy?
First of all, it’s important to say that bankruptcy should only be considered if all other debt solutions have been explored, and it’s clear that you won’t be able to pay your debts off in a reasonable amount of time.
If this is the case and you have sought the advice of a debt expert and know that bankruptcy is the right option, you are able to declare yourself bankrupt. This would involve applying to the courts and paying a deposit of £525 plus a court fee of £180.
In October 2015 the government changed the rules on how much debt you need to have before a creditor can make you bankrupt – you now need to owe a minimum of £5000, rather than £750. This should mean that creditors will find it harder to force certain people into bankruptcy and this solution is reserved for people with more sizeable debts, as it was designed to be.
There is also a possibility that you can go bankrupt if your IVA is going to fail, although you would have to speak to your Insolvency Practitioner to make sure that applying for bankruptcy was the best course of action.
That'll do for today. Come back tomorrow for part two.
by Christine WalshBack to blog home