What is Bankruptcy?
There are various options available for people looking to break free of debt. One of these is bankruptcy. Bankruptcy is a type of insolvency that people undertake when they cannot repay the money they owe. If you declare bankruptcy in the UK, personal assets such as your car and any properties you own will usually be sold off to repay your outstanding debts. As such, if your assets are worth more than your debts, or you can continue to afford to make your debt repayments, personal bankruptcy is not recommended as the best option for you. Whilst bankruptcy may be a good option for some, there are many restrictions connected with it, such as it being very difficult for you to get further credit in the future. Furthermore, some debt such as student loans, secured debts, child support and fines are not covered by bankruptcy. Therefore, declaring bankruptcy may still leave you with debts that need to be repaid. Because of these factors and many others, bankruptcy should only be undertaken once you have spoken to a financial expert and all other options have been considered.
Is Bankruptcy my 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
Is Bankruptcy Right for me?
In addition to you declaring yourself bankrupt, a person or company you owe money to can apply to the courts to make you bankrupt. Creditors can do this without your permission if you owe them more than £5,000. Bankruptcy generally lasts for 1-year, after which your unsecured debts will be written-off; thereby allowing you to make a fresh start. However, going forward you will be subject to various stringent financial restrictions, such as being denied further loans, as your bankruptcy status will remain on your credit file for a period of up to 6-years or more. Because bankruptcy can be complicated, and there are many different factors to consider, one of the most frequently asked questions we hear is ‘How do I go bankrupt?’ To help you better understand what is involved and how it will affect you, we have included detailed information regarding every aspect of the process. Furthermore, our financial experts are on-hand to help you with any questions and concerns you may have regarding bankruptcy.
Bankruptcy in Scotland
For people living in Scotland, bankruptcy is more commonly referred to as Sequestration. Sequestration is simply Scotland’s version of bankruptcy; with the laws regarding this very similar to those covering bankruptcy in the rest of the UK. Just like in England, Wales and Northern Ireland, bankruptcy in Scotland involves your assets being transferred into the control of an appointed Trustee. Similarly, bankruptcy in Scotland can either be done voluntarily or be forced upon you by those you owe money to. If you are unsure about whether you can quality for this or you would simply like to learn more about this option, our financial experts are on-hand as always to answer any questions you may have.