Bankruptcy Advice (Call 0800 138 2299)

Consider the negatives before jumping into bankruptcy.

• Difficulty opening bank account
• Credit status affected long term
• Bankruptcy published in the newspaper
• Cannot obtain a mortgage
• May struggle with a new tenancy agreement
• Some employers check for bankruptcy when you apply for a job

What is Bankruptcy?

Bankruptcy is an option that could be considered when an individual cannot pay their debts and are generally struggling. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order (there is the possibility that in some cases the bankruptcy discharge period will be less than one year).

There are alternatives that should be considered before opting for bankruptcy, for example an Individual Voluntary Arrangement (IVA) can help you get out of debt in a set period of time without the stigma and setbacks that bankruptcy can cause. Speak with a Chase Saunders debt advisor who will give you the best possible advice regarding your situation.

Bankruptcy is one of several ways of dealing with debts you cannot pay.

How bankruptcy works:-

1. Free you from overwhelming debts so you can make a fresh start, subject to some restrictions

2. Make sure your assets are shared out fairly among your creditors.

Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.

How you can be made bankrupt?

An individual can be made bankrupt either in one of three ways:

>>    Voluntarily - By the debtor themselves.

>>    Involuntarily - By the creditor owed money (£750 Minimum).

>>    The supervisor or anyone bound by an IVA

A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditor's claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order is made is both difficult and expensive.

What are the implications of bankruptcy?

>>    You lose control of your assets.

>>    You cannot obtain credit for over £250 without the permission from the lender.

>>    Your credit is affected for many years after the annulment.

>>    You could have a problem opening a bank account.

>>    You cannot act as a company director.

>>    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.

>>    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.

>>    You may be publicly examined in court.

>>    You may have a problem renting a house.

>>    You could have a problem if you are seeking employment, if a credit check is made an          applicant who isn't bankrupt could get the job ahead of one that is.

What are the advantages of bankruptcy?

For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year (or less in some cases).

For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out.

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