If you are in a critical financial crisis and plans to file for bankruptcy, perhaps you have a lot of questions in mind. In this article, we highlighted the most significant details that you must be aware of before going bankrupt.
Bankruptcy works in several ways depending on where you reside in the UK. For Scottish bankruptcy, you can check sequestration. If you live in England, Wales, and Northern Ireland, the following information will outline the process.
Moreover, being bankrupt means all of your debts are written off. Though this may sound ideal, you have to ensure that bankruptcy is the right option for you. It comes with both benefits and risks that can affect all aspect of your life and well-being.
Is bankruptcy right for me?
Bankruptcy is a form of insolvency and suits you if you don’t have any means to pay back what you owe to your creditors.
Assets you own are usually sold to pay your debts utilising the proceeds earned from the sale. This means that bankruptcy will suit you best if your total assets are worth more than your debts and you can still keep your payments up to date.
After a bankruptcy discharged your creditors will write off your unsecured debts. This can give you a chance to become debt-free and get back on your feet. Bankruptcy usually lasts for 12 months. During this time, you’ll be under bankruptcy restrictions. Additionally, after your bankruptcy, your record will remain on your credit file for 6 years, which can make it hard for you to obtain credit or loan.
How can I go bankrupt?
You can apply for bankruptcy by applying to the Insolvency Service in England and Wales, the Accountant in Bankruptcy in Scotland or the High Court in Northern Ireland.
FAQs about Bankruptcy
What debts are included in bankruptcy?
Bankruptcy will write off most of your debts but not all. Check our guide on: Debts that are Included in a Bankruptcy
Can I apply for joint bankruptcy?
Joint bankruptcy is only available for business partners. Joint debts can be included in a bankruptcy, affecting the credit file of the other person in joint debt. You can also get some thoughts on this guide: What is Joint Bankruptcy?
What is voluntary bankruptcy?
Voluntary bankruptcy is when you apply to make yourself bankrupt. You check the following guide to get further details: What is Voluntary Bankruptcy?
Can my creditors apply for bankruptcy?
Your creditors can apply for your bankruptcy if you deliberately ignore your debts. Check our guide on: Can A Creditor Apply for My Bankruptcy?
Bankruptcy Help and Advice
Before you file for bankruptcy, you have to explore other alternatives that suits you. You should consider getting debt advice before taking any steps to resolve your debt. You can contact us for a free debt advice and we’ll help you determine if bankruptcy would be best for you.