Bankruptcy Advice

When you are facing financial disaster good advice is worth it's weight in gold, and anyone threatened with or considering bankruptcy is in need of the right advice and a full choice of alternative options more than anyone.

Disadvantages of Bankruptcy?

Bankruptcy is generally the last option for people who are unable to find any other solution to their financial problems. This doesn't mean that it's not the right choice for many – it often is. But, life will certainly not be easy after becoming bankrupt, especially when it comes to rebuilding your credit rating in years to come:

• Everything you own, apart from what is required for a basic standard of living, will taken from you and sold. This may include your house and car.
• You will not be allowed to obtain more than £500 worth of credit without disclosing that you are bankrupt.
• Any income you have in excess of that needed for your basic needs may have to be paid to your creditors.
• Your job may be at risk: certain trades and professions will not allow you to work for them if you are a bankrupt.
• Your credit rating will hit rockbottom and will remain there for up to 10 years (this is how long your bankruptcy will remain visible on your credit file)
• You will have all your credit card accounts closed and probably your bank accounts too (although some basic banking facilities are available to bankrupts).
• Your bankruptcy will be advertised in newspapers.

Advantages of Bankruptcy?

If you become bankrupt almost everything you own becomes available to your Trustee to sell and pay off what you owe to your creditors (after the Trustee first takes their fees from the proceeds). But, for some, bankruptcy may be the best (and in some cases the only) option:

• From the moment you are declared bankrupt you become debt-free and are no longer liable for your unsecured debts - these then become liabilities of your bankrupt estate for your Trustee in bankruptcy to deal with
• Bankruptcy now lasts for only 1 year, in the past it was 3 years and 5 before that
• If you live in rented accommodation and up to date with your rent you will be able to continue living in the property. You have little to lose and ALL your debts will be written off.

At The Money Helper we have a debt solutions team with experience, knowledge and solutions which are the envy of the industry who will be able to advise if there may be another option available and to assist if at all possible. Other options include Debt Consolidation, Debt Management, Individual Voluntary Arrangement (IVA)