The Debt Advice Online Blog

If you are thinking about filing bankruptcy, you will need to weigh the pros and cons of the situation. Of course bankruptcy is not the best option for everyone, but for most it can mean getting back on track with your finances and being able to free yourself from the debt you’re drowning in. With a little advice, it may be an easy choice.

The disadvantages of bankruptcy are that you will lose control of your assets and your credit will be scarred for years to come. All of your assets have the potential of slipping through your fingers, even your home. You will not be able to get more than £500 credit unless you are willing to disclose first tat you are bankrupt. Your credit rating will be under fire for a while, and this will set you back in trying to borrow money.

What is the most disadvantaged is the fact that your bankruptcy will be made public knowledge in the newspapers. This, for some profession, can cause you to lose your job. Certain job markets will not let people work for them while they are bankrupt.

There are, however, advantages to filing for bankruptcy if you are in the position where you will need to do so. If you file for bankruptcy, you will have all of your debts written off. For most people, that means that they will become debt free within a year. Also, if you rent a place to live you will be able to continue living there and paying rent, even after all of your debts are written off at the end of the period of bankruptcy.

And if you decide to file for bankruptcy, then you decide that this choice wasn’t right, there are options where you can annul your bankruptcy order. You can do this if you can prove that the bankruptcy order should not have been made, the creditors agree to an individual voluntary arrangement, or that the court is satisfied that you have paid all of your debts or they are guaranteed that they will be paid within a certain amount of time. If you the order is annulled, you will be able to return to pre-bankruptcy status.

There are also restrictions on filing for bankruptcy. You will not be able to obtain more than £500 in credit without disclosing the bankruptcy. You cannot carry on a business with a different name to hide the bankruptcy. You will also need permission from the court to form or manage a company. Some professions are also restricted to work while bankrupt, and you have to notify any bank when you open an account that you are bankrupt.

Bankruptcy is a choice that should not be made lightly. If you are thinking about it, weigh all of your options first. There are many different pros and cons to the filing of bankruptcy, but only you and your creditors will be able to determine whether this is the best option for you or not.

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It is a well known fact that even through you plan and budget for your life, sometimes things happen which you did not have any way to pre-plan for. The reality of life is that people loose their jobs, businesses go out of business, illness and death happens in families, and the list goes on and on. While there are no certainties in life, you can do the best to always plan for the unknown. However, what happens if your unforeseen event happens when you are just starting out? Or, what happens when your unforeseen event happens when you are just starting to recover from yet another catastrophic event? It is in this time in your life where bankruptcy can be the financial tool with is the answer to your problems.

Bankruptcy is a Financial Tool

While bankruptcy has always been a tool used by businesses without much stigma, the same cannot be said for individual bankruptcy. Here in the U.K. the act of someone filing for personal bankruptcy does have a stigma attached to it. Thankfully, people are starting to realize that bankruptcy is simply a financial tool which is necessary for individual people to use, just as it is necessary for businesses to use.

Bankruptcy was designed to offer people, and businesses alike, a fresh start at their financial lives. What bankruptcy does is allow all of your non-secured debt to be discharged while allowing you to keep a reasonable amount of your assets intact to allow you to continue to live your life. This makes bankruptcy a valuable financial tool to use if you are in a position where you are likely to improve your financial situation from this date forward. Bankruptcy essentially clears off the financial slate of your life and allows you to start over from scratch without any debts dragging you down.

The Negative Effects of Bankruptcy

Bankruptcy does not come to you as an option without costs. There are costs of the process itself, as well as costs to your credit rating for many years following your discharge of debts. You can basically count on bankruptcy ruining your credit rating for six years. However, even during this post-bankruptcy six year timeframe, you can begin to slowly rebuild up your credit rating. Ultimately, once the six years has passed, then you will be in good standing again with your credit scores and able to move on with your life.

Whether or not bankruptcy is right for you is strictly a personal choice; however, it is vital that you keep in mind that bankruptcy is a financial tool which was designed to give you a fresh start if you need one.

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