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Bankruptcy Advice – Frequently asked questions
If you are struggling to pay the money you owe to creditors, there are various options available to you. These options vary depending on details such as the type of debt you have, how much you owe and what your personal assets are. If you believe you can’t repay the money you owe to creditors, one of the options you have is declaring bankruptcy. To ensure you fully understand what this means we have compiled a small list of FAQs below. If you have any further questions, we are of course on-hand to provide any bankruptcy help you may need.
Is Bankruptcy the Only Option for me?
The answer of course depends on your own specific situation. However, in general, bankruptcy should always be considered as a last resort. There are many debt repayment options available to you and we will of course help you to see the pros and cons of each, including Debt Consolidation Loans, Individual Voluntary Arrangements and IVAs, as well as providing free bankruptcy advice.
Can I Declare Myself Bankrupt?
Yes. Either you can apply for bankruptcy yourself or you can have it forced upon you by one of your creditors. Whilst it is of course better for you to enter bankruptcy voluntarily, it does not make any real difference to the overall process or the restrictions placed upon you.
How Long Will I be Declared Bankrupt for?
In general, and if everything goes smoothly, you will receive an automatic discharge after 12 months. However, this can be extended if you fail to cooperate with the Trustee in charge of your bankruptcy or you have been judged to have gotten into debt recklessly, dishonestly or found to have given false information.
Is Bankruptcy your best option?
Bankruptcy is the best route for many with extreme debt, however it isn’t the only option. Depending on your level of debt, your future financial outlook and other factors such as your profession, and your assets, there may be other better options. These options include debt consolidation, Individual Voluntary Arrangements (IVAs) and Debt Relief Orders (DROs). Complete our quick online assessment to see which is best for you.Take our quick online test
What Restrictions will be Placed Upon me?
You will be unable to serve as a company director for the duration of your bankruptcy. Furthermore, if you are self-employed you will only be allowed to trade in your name. In addition, you will not be able to apply for credit of over £500 without declaring your bankrupt status; which may of course make it more difficult for such credit applications to be approved. Depending on your career, you may also be subject to other restrictions.
How Much Money do I have to Repay Back?
The amount you will be required to repay depends on your income. If you are deemed to have enough money after your living costs have been deducted, you will be required to contribute towards your bankruptcy for a period of up to three years. To give you a better idea as to how much this may be, we can help you quickly calculate what you will be required to pay each month after all deductions have been taken into account.
Will I Have to Sell my Home and car?
Possessions that are considered essential, such as your home, will not be included in your bankruptcy. Cars are also protected as long as you can prove that they are essential to your working life. However, the Trustee is entitled to ask you to downgrade assets if they are considered as being too extravagant. Furthermore, the situation is made more complicated if you rent where you lived. In addition, non-essential assets worth over £1,000, including equity in property, will have to be turned over to your creditors. We will of course work closely with you to ensure that you know exactly what is and what is not included in your bankruptcy.
Can I Include all my Debts in the Bankruptcy?
No. Whilst bankruptcy does cover most of your debts, including credit cards, utilities charges, council tax, and VAT, other debts will remain to be your responsibility after you have been declared bankrupt. Such debts include matrimonial, criminal and student debts.
What will Happen to my Credit Rating After Bankruptcy?
Once you have been declared bankrupt, it will remain on your credit record for up to six years. During the period you are classified as being bankrupt, certain restrictions will be placed on you. One of these being the need to declare your bankruptcy if you require credit of more than £500; which will of course make it more difficult for you to obtain such credit. As with every other aspect of your personal debt, our financial experts can provide you with professional bankruptcy advice to allow you to make a more informed decision.