Outlined below are some of the benefits and drawbacks of bankruptcy. It should be noted that bankruptcy is not to be entered into without first having sought professional advice.
There is more to bankruptcy than as a way of finally putting an end to harassing debt collectors and creditors. One big side effect of bankruptcy being that your life is likely to be subjected to intense scrutiny.
These are some of the benefits of bankruptcy:
Relieves the stress caused by dealing with numerous creditors.
Once a bankruptcy order is made, a third party takes over the administration, decision making and payment process of the debts.
Creditors forced to recognise that they must accept less money than is owed.
Debtors typically pay less with a bankruptcy order than with an Individual Voluntary Arrangement.
Once discharged, most debts are written off and creditors cannot pursue them.
Here are some of the drawbacks associated with bankruptcy:
The debtor will lose any realisable assets of value.
If the debtor owns equity in a home, this will almost certainly be sold.
If a business is owned, this could be sold and any employees dismissed.
Bank current accounts can be difficult to obtain.
It is a costly process. All fees for the insolvency service, courts and any trustee are taken out of the debtor's assets.
If trying to obtain credit of more than £250 the debtor must disclose his status as an undischarged bankrupt. The debtor must allow all his financial affairs to be scrutinised.
Names of those made bankrupt are published in the London Gazette and the local press and can be viewed online at the Insolvency Service website, making them accessible to anyone in the world.
Cannot hold certain public offices, such as MP, councillor or magistrate, or practice certain professions, such as solicitor and accountant.
A bankrupt may not hold office as a trustee of a charity or a pension fund.
A bankrupt is not allowed to be a company director or trade under any other name than the one used at the time of bankruptcy.
The trustee must be informed of any changes in circumstances during the bankruptcy.
Certain debts cannot be written off: fines, maintenance/child support payments, other family court orders, debts to secured creditors, debts from personal injury claims, debts incurred through fraud, debt arising from certain other orders of the criminal court.
Bankruptcy does not affect the rights of secured creditors. Where there are joint debts, creditors can still pursue the non-bankrupt debtor.
Bankrupts found to be blameworthy, culpable or dishonest can be made subject to a Bankruptcy Restrictions Order which can impose the same bankruptcy restrictions, plus some additional ones, for anywhere from 2 to 15 years.
You may freely reprint this article provided the author's biography remains intact:
About The Author
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.
Next to winning the lottery, a debt consolidation loan is... Read More
Of all the problems possible in a marriage, finances cause... Read More
The business of banking has changed dramatically over the last... Read More
In today's consumer society it is all too easy to... Read More
An inability to manage credit, growing debt and bankruptcy are... Read More
In March 2005, the U.S. financial services industry succeeded in... Read More
Debt consolidation, equity loans, credit counseling, debt management plans, even... Read More
We've all heard the phrase, "You have to start somewhere."... Read More
On April 20, 2005, President Bush signed into law the... Read More
Decreasing your debt is paramount to having a good credit... Read More
As they stare down at a teetering pile of bills,... Read More
What is Credit?Credit means that you are using someone else's... Read More
On October 17, 2005 President Bush's sweeping bankruptcy reform law... Read More
Are you among the millions of people who have found... Read More
People over extend themselves financially as a result of a... Read More
Outlined below are some of the benefits and drawbacks of... Read More
In all the technical discussion you hear about credit... Read More
Are you still clearing a mountain of debt amassed last... Read More
Who will benefit from the new bankruptcy reform laws? The... Read More
People often get to a place where they simply can't... Read More
Debt is quickly becoming an epidemic in America. However, through... Read More
The Bankruptcy Abuse and Consumer Protection Act, signed into law... Read More
Do you have multiple debts? Do you have just one... Read More
The first and maybe most important step in a debt... Read More
Signing up for a debt management program is easy; it's... Read More
If you once have been caught in the debt trap,... Read More
It all starts by defaulting on an obligation: Money owed... Read More
Want to know if your attitude towards your finances is... Read More
Ask a friend what resolutions they made for 2004 and... Read More
I'm sure you'll agree that budgeting, saving money, and eliminating... Read More
So you've screwed up. You're drowning in debt. Maybe the... Read More
Good credit is everyone's dream. A wise use of credit... Read More
Bankruptcy is one of the tougher choices we as adults... Read More
There is a law all smart people break.Parkinson's law.Parkinson's law... Read More
A few times I wonder what sort of credit system... Read More
"Legally terminate credit card debt! You can be debt-free in... Read More
If you once have been caught in the debt trap,... Read More
At some time or another during our lives most of... Read More
No, that's not a misprint. Even though falling interest rates... Read More
In March 2005, the U.S. financial services industry succeeded in... Read More
Vehicle repossession may appear justified in circumstances where a person... Read More
Credit card debt elimination can be done with a good... Read More
An inability to manage credit, growing debt and bankruptcy are... Read More
It's never pleasant to realize that you're in financial hot... Read More
The overwhelming task of eliminating your debts can often seem... Read More
Credit counseling is a viable option for those who are... Read More
To be out of credit card debt is your dream... Read More
As consumer debt continues to spiral out of control, debt... Read More
Outlined below are some of the benefits and drawbacks of... Read More
Personal bankruptcy is a legal way to give people with... Read More
Do you have stacks of unpaid bills?Are you in debt?Are... Read More
Debt consolidation versus debt negotiation are two options that are... Read More
WILL MY CREDITORS STOP HARASSING ME?Yes, they will! By law,... Read More
If you are considering bankruptcy as a solution to your... Read More
The United States Senate passed a law on March 10,... Read More
Wholeness requires separation. In order for you to experience yourself... Read More
You may not realize what that credit card bill is... Read More
If you're reading this article right now I'm sure that... Read More
A debt solution like bankruptcy should really only be used... Read More
What is a debt management system, and when do you... Read More
Debt is becoming number one problem in the United States... Read More
There is current concern from the Bank of England that... Read More
In April 2005, Congress made sweeping changes in U.S. bankruptcy... Read More
Let's look at a real world example: A woman purchased... Read More
An IVA (individual voluntary arrangement) is an alternative to bankruptcy... Read More
Filing bankruptcy is not fun! It is a last resort... Read More
Debt Relief |