Bankruptcy & Liquidation
Do I need to Declare Myself Bankrupt?
In some situations, the best way to solve your debt problem will be to declare yourself Bankrupt.
Please call us for FREE advice if you are considering going Bankrupt. It has a lasting effect and should only be considered as a last resort. We may be able to help you avoid Bankruptcy - there are other options and you should be absolutely sure that declaring yourself bankrupt is the best solution to your problem before you do.
Is there a difference between Bankruptcy and Liquidation?
Bankruptcy refers to private individuals - Liquidation refers to companies.
Both will be determined by your local County Court (or the High Court in London). Once the Bankruptcy Order is made by the Court then the Insolvency Service (also known as the Official Receivers) or a Private Insolvency Practitioner will be appointed to pay off debts using your assets (belongings). – Click Here for more information
Bankruptcy is a fresh start, a way of dealing with debts that you cannot pay. However it should not be rushed into - be sure to get advice before you take this drastic action.
What are the Advantages of Declaring Bankruptcy?
- It will stop other debt collection procedures - no more letters, phone calls, or bailiffs at the door.
- The matter is taken out of your hands. Once the Bankruptcy Order is made by the Court, settlement of the debts will be taken over by the Official Receiver / Trustee.
- Once the Bankruptcy is 'discharged' most debts are written off and you can make a fresh start.
Not all debts are written off - you cannot avoid secured debts (for example mortgages), court fines or debts from certain court orders, money owing to the Child Support Agency and student loans granted before March 1999, amongst others.
What are the Disadvantages of Declaring Bankruptcy?
To start with...
- Your 'assets' (belongings) can be sold. This could mean losing your home, car and other valuable possessions. If you own a business it may be sold to pay your debts.
This can also include assets you do not have at the moment but expect to get during the period of Bankruptcy - future earnings / inheritance etc. - Bankruptcy will be advertised locally and your details will be added to the Insolvency Service's online database.
- It costs you money - you will have to pay Court and Insolvency Service fees, plus administration charges to the Official Receiver / Trustee.
After the Order is made...
- You cannot apply for credit of over £500 until your Bankruptcy is 'discharged' without declaring your status.
- You cannot be a company director until your Bankruptcy is 'discharged'
- Your status will be kept by Credit Reference Agencies for up to six years - this will mean problems getting mortgages, loans or other credit
- You might find it hard to get a bank account
- Your financial affairs will be open to very close examination
- Utility companies may require a security deposit and fit a payment meter.
If you rent a property, your landlord may be informed.
