Bankruptcy
Bankruptcy is only available for people who live in England, Wales or Northern Ireland and is considered a last resort - all other solutions will be reviewed before bankruptcy is advised.
Bankruptcy has some advantages:
- Your creditors will no longer be able to pursue you or take action against you to recover what you owe
- You will not have to make further payments to your creditors, but will have to pay any surplus income over to your Trustee
- All of your debt will be written off providing you with a fresh start
- Income from benefits or pensions will be yours to keep
- You can expect to be discharged after 1 year and will then be free of debt
There are also disadvantages:
- f you own any valuable assets, including endowment policies, these will usually have to be sold
- It restricts your ability to obtain credit in the future without permission from the lender and your credit rating can be affected for many years after the annulment
- You are not allowed to be involved in the day-to-day management of a limited company plus some additional restrictions
- There may be a clause in any hire purchase agreements that you have which may terminate automatically if you become bankrupt
- There will usually be a fee to pay with your application
- Your bankruptcy will be advertised in a local newspaper
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