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What is it?
If an individual has accumulated a debt or combination of debts too large to pay
off, one alternative is to file for a bankruptcy order. This means giving up
control over your finances and all assets with a value over £5000 to an Official
Receiver who will distribute your finances and valuable assets between your
creditors to pay off your debts. If this is the first time an individual is
filing for a bankruptcy order their credit history can be cleared in
twelve months. Bankruptcy has bad stigma and your case is publicly advertised in
the newspaper. Bankruptcy
entails the following:
- Closing your
current bank account.
- If applying
for credit over £250, you are obligated to declare your bankruptcy.
- Your
bankruptcy case may be available in your credit history for at least 6
years.
- The official
receiver will own all your assets and will decide how their value will be
distributed amongst the creditors.
- You are not
guaranteed continued employment during the bankruptcy process.
- You will not
be able to obtain positions as company director or manager without the
courts permission.
- You cannot
practice law, enter parliament or become a member of the local authority.
Debt management
A Debt
Management company helps you communicate with creditors, persuading them to
lower your monthly payments to take the ease of your financial situation. They
will regularly conduct consultations to review your financial progress and
assist you manage your finances.
Note: Be careful
of companies advertising debt consolidation' or ' debtor-creditor arrangements, make sure you research
them before entering an arrangement. |
