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 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.
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