Bankruptcy Advice | London

Bankruptcy is a way of legally declaring your inability to pay your debts. It is normally chosen as a last resort, but for some can be their only means of a new start. You can enter into Bankruptcy yourself, or if you have debts of over £750 your creditor/s can apply to make you Bankrupt.  Other Debt Solutions such an IVA may help solve your problem before you have to resort to bankruptcy.
Although Bankruptcy frees you from your debt because of the inability to pay it, you must remember that although your debts will be cleared your assets such as your house, car, valuables, life insurance plans, etc could all be sold off in order to pay as much of the debt as possible. It also can mean other restrictions relating to your work (e.g. loss of career) that’s why you should view this option very much as your last resort.

An individual can be made bankrupt either in one of three ways:

• Voluntary Bankruptcy - Where you make yourself Bankrupt
• Involuntary Bankruptcy - Where a creditor you owe money to (£750 Minimum) makes you Bankrupt.
• The supervisor or anyone bound by an IVA can be made bankrupt if the terms are not followed.

Bankruptcy is the last resort and brings with it some serious implications. People may find out that you are Bankrupt as Bankruptcy Orders are advertised in the London and  local newspapers. Your details will be placed on a Bankruptcy Register which is maintained by the Department of Trade & Industry and The Insolvency Service. The Register is a public document and can be viewed by the public on the internet. Anyone who you have been involved with financially will be informed of your Bankruptcy. This includes, Banks, Building Societies, Mortgage Companies, Loan Companies, HP Companies, Your Landlord, Creditors and any Pension and Insurance Companies.
Other implications of Bankruptcy include...

• If you are a renter, your landlord will find out.
• In some occupations your employment may be at risk i.e. You cannot be a company director, you may not practice as an Accountant / Lawyer / Justice of the Peace / Member of Parliament, you cannot take part in the promotion, formation or management of a limited company (LTD) without permission from the court.
• You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
• You lose control of your assets.
• You cannot obtain credit for over £250 without the permission from the lender.
• Your credit is affected for many years after the annulment.
• You may be publicly examined in court.

Bankruptcy has changed over the years. Currently, the time for being discharged from your Bankruptcy is after a maximum period of 12months. After this time, you will no longer be bankrupt though the length of time can vary in different circumstances.
When your Bankruptcy has finished, it is important to remember that the effects of Bankruptcy extend far further than just one year i.e. your credit rating will be affected for many years.

Many people believe that bankruptcy is their final and only choice. However, Debt Advice London have other solutions that may resolve your debt issues. Bankruptcy may not be your only option. For example depending on you circumstances you could have the option to take an Individual Voluntary Agreement or Debt Management Plan. For more information on either of these options call now on 0800 043 0550. Debt Advice London offer you totally free debt advice. We deal with all types of debt problems and we will help you achieve your best possible solution.