Credit Faqs

If you cannot pay your debts, then bankruptcy is one of the ways of dealing with the problem. For first time bankrupts, the term is typically a year or less from the date of declaration.

While it has quite a stigma attached to it, in some instances it represents the best way to get out of financial trouble. Bankruptcies are advertised publicly, but in reality few people read these notices.

It can be a good solution in some circumstances, but it is by no means the only one. Alternatives such as the Individual Voluntary Arrangement scheme should also be considered.

If you are declared bankrupt, your debts will be cleared, and your assets shared out among your creditors, leaving you with a clean slate, albeit with some restrictions.

Bankruptcy can be voluntary or involuntary. You can declare it yourself if you think it is the best way to solve your financial woes, or your creditors can force it upon you if you owe any of them more than 750GBP.

Even if you disagree with or do not acknowledge bankruptcy proceedings, they can still be brought against you. In this situation, it is very much in your interests to cooperate fully from the start.

If you have a difference of opinion with the creditor that is bringing proceedings against you, it is a good idea to try and sort this out before proceedings begin, as it is very difficult to do this afterwards.

Bankruptcy carries with it a number of negative implications. You lose control of your assets, you cannot obtain credit of over 250GBP without the permission of your former creditors, and there are a number of employment positions that you will be forbidden from taking, such as director of a company or a chartered accountant. You will also not be allowed to form or promote a limited company.

Leopoldo Hores has recently been looking into services that provide debt advice and has made an individual voluntary arrangement with Blair Endersby.

Article Source: A guide to bankruptcy Article