If the world was perfect we would be able to repay our debts through a debt management programme or IVA. However in this time of recession increasing numbers of people are finding they just can’t cope with the rising prices, loss of a job or other problems that surface at times when the economic landscape is so bleak. Many people every week are now so burdened with debt that they are choosing bankruptcy as the best option for them.
The UK government Insolvency Service has this to say about bankruptcy. "Before you take any action to apply for your own bankruptcy, you should get your own legal or financial advice about bankruptcy and the other options available to you. The Insolvency Service and the courts cannot advise you on specific insolvency problems; for example, whether you should go bankrupt or your company should go into liquidation, or whether you should look at alternatives. You should get independent bankruptcy advice. You may consult a solicitor, a qualified accountant, an authorised insolvency practitioner or a reputable financial advisor."
Debt Clean Now are here to give you just such free, impartial, reliable and informed advice. In the past people just like you have tried to avoid bankruptcy because bankruptcy was thought to be something irresponsible people did and there was a stigma attached to it. However bankruptcy today is often chosen because in many cases it is the most beneficial and intelligent solution to a very difficult debt problem.
Bankruptcy can have serious implications though which is why it is important to speak to experts such as Debt Clean Now. Bankruptcy is a legal procedure where you are deemed unable to pay your debts. Often the person going bankrupt will instigate the procedure themselves, or sometimes it is the creditors who will instigate the process.
A bankrupt cannot be a director or involved in the financial management of a company for a period of time, usually 12 months, without the leave of the court and he cannot incur more than £500 of credit without letting the lender know of his bankrupt status. There are some jobs where someone who is bankrupt will be barred from entry. So bankruptcy is not something to rush into. It is important to get the right advice about bankruptcy from experts.
At Debt Clean Now we pride ourselves on our ability to give expert advice On the matter of bankruptcy. We will look at your situation, based on the information you give us and help you decide between bankruptcy, a debt management or IVA programme.
Call us today and get your debt problem handled!
1. So bankruptcy still has very serious implications?
It can have serious implications for a lot of people and it’s important to think carefully before going into bankruptcy. It isn’t necessarily as easy as the media would have you believe.
In a perfect world, you would be able to easily repay your debts, or enter into an IVA agreement to repay your debts over a five year period to avoid bankruptcy. But we don’t live in a perfect world, do we?
Today we live in a UK under siege from rising fuel and petrol prices, skyrocketing food prices, inflation and income stagnation.
So what reasonable solutions exist today for good people with bad debt? The cold answer, not many. Creditors have gutted the access to the IVA for many people by refusing repayments unless they feel it is worth their time. Now isn’t that just ironic, creditors are actually refusing to accept reasonable payments. Instead, creditors want consumers to avoid bankruptcy and agree to nominal monthly payment plans that will almost never clear the debt, even over a number of decades.
Bankruptcy is a legal solution to eliminate your debt, and one that should be explored.
But before you jump into bankruptcy, Read what the UK government Insolvency Service has to say about bankruptcy.
"Before you take any action to apply for your own bankruptcy, you should get your own legal or financial advice about bankruptcy and the other options available to you. The Insolvency Service and the courts cannot advise you on specific insolvency problems; for example, whether you should go bankrupt or your company should go into liquidation, or whether you should look at alternatives. You should get independent advice. You may consult a solicitor, a qualified accountant, an authorised insolvency practitioner or a reputable financial advisor."
And that is why this site is here, to offer you help and assistance to make sure that bankruptcy is right for you. If you want assistance to go bankrupt, would like for us to complete your bankruptcy forms for you, or maybe you just need some specific advice, help is available here
2. What assets would I stand to lose?
When you become bankrupt, a Trustee in Bankruptcy is appointed to determine which of your assets are eligible to be sold in order to repay some of what you owe to creditors. Trustees in Bankruptcy are either a civil servant (an Official Receiver) or a Licensed Insolvency Practitioner. They will group your assets into various categories.
Assets you are allowed to keep include most household contents (with the exception of valuable antiques), a modest vehicle and your tools of trade. You can also keep your pension fund, so long as it’s a fund approved by HM Revenue & Customs, although your Trustee may seek to recover for the benefit of your creditors any excessive contributions.
Assets that can be sold include your personal property and any investments you have, like endowment policies. Should you receive a windfall, such as a legacy, this money will also go to you creditors. The Trustee is also able to apply to court for something called an income payment order if you are seen to have surplus income available.
3. So I could lose my home?
Your home is especially at risk because it is typically where the most value lies. There are a number of scenarios, depending on the amount of equity the bankrupt has in their home.
For those who have some equity in their home and are the sole owner, the Trustee will generally immediately seek to take possession and evict the bankrupt. For those with no equity or 'negative equity' in their home, the Trustee in Bankruptcy will not usually seek to have the house sold. (Negative equity is when the first mortgage and any subsequent charges on the property exceed the value of the home.) This doesn’t mean that the mortgage company or the second charge lender won’t seek to force the sale of the property.
If your spouse or children are living with you at the property, you may be able to seek to defer any sale by the Trustee until the end of the first year after your bankruptcy. After that time, the interests of your creditors will usually come first and the court will only refuse an order for sale in exceptional circumstances or if the value of your interest in the property is worth less than £1,000. Before seeking an order for sale, the Trustee would, however, usually offer the bankrupt’s spouse the option to buy out the bankrupt’s interest in the property. But if they are unable or unwilling to make this payment the Trustee could obtain an order forcing the sale, regardless of whether there are children or other dependent relatives living there.
4. How long does this period of being a bankrupt last?
The bankruptcy period usually lasts just 12 months. However, if you incurred your debts irresponsibly (through gambling, for example), or if you incurred your debts when there was no realistic prospect of repaying them, then the Official Receiver could obtain a bankruptcy restrictions order against you. This means the bankruptcy conditions could apply for a further two to 15 years. About 1,000 people a year currently have these additional restrictions placed upon them.
5. Do other people have to know that I’m a bankrupt?
The first thing that happens in any bankruptcy is that it is advertised in a publication called the London Gazette. It is also published in your local newspaper, specifying your name, your occupation and your address.