Bankruptcy Pros and Cons
Bankruptcy Pros and Cons
Bankruptcy is an extremely effective debt solution for some, and not for others. It depends entirely on your circumstances and what is right for you.
Advantages
- All of your pre-existing debt is wiped off.
- Creditors can no longer hassle you.
- First-time bankrupts are usually discharged within 12 months (sometimes sooner).
- If you rent or live with parents you don’t risk losing your home.
- You can keep tools of your trade.
- You can keep a car worth £2500 or less.
- You have the chance to rebuild your credit rating once discharged.
- You can get your finances back on track.
Disadvantages
- You lose control of your assets (house, savings, expensive car (over £2500)
- You cannot obtain credit for over £500 without the declaring that you are bankrupt
- You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court
- You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy
Occupations affected
- You cannot act as a Company Director.
- You may not practice as a Charted Accountant / Lawyer.
- You may not act as a Justice of the Peace (JP).
- You may not become an Member of Parliament.
- You may not become a Member of the Local Authority.