Your debt is overwhelming and you are really in a bad place! You really need to know how to get out of debt. You need to look at what you can do to get yourself out of this hole. There are many solutions and one of these is bankruptcy. This isn’t a decision to take lightly but it is a way to write off your debts and start a fresh new financial chapter. Then again if you have a house or a car those things will most likely be included in your estate and you will lose them. Again on the positive side you won’t be hearing from the people you owe money to anymore, but you probably will find it difficult to take out credit of any kind for a good long time. There are many considerations and many questions.
What is bankruptcy?
- What is Bankruptcy? It is sort of like being insolvent. It is when all that you own can not cover the amount that you owe. When you go bankrupt all your assets, cars, house, valuable items will be sold to pay your debt and the remaining debt will be written off after a certain period of time.
- How do I ‘go’ Bankrupt? You will need to apply to the local court. You either appear there or are given an appointment. It does cost you to go bankrupt. 700 pounds to be precise, split between the Official Receiver (who will administrate your bankruptcy) and court fees.
- How long does Bankruptcy last? Usually you will be let off after a year in most cases because you have cooperated well with the Official Receiver. If you haven’t it can go on for up to six years. After the year is over all you debts are written off.
- What happens if things change for me after Bankruptcy? It is only really during bankruptcy that you are obliged to inform the official Receiver if things change in your situation, like for example, you move or have a baby. After you are released you are free to do as you wish.
- What about my bank accounts and credit rating? Your bankruptcy will remain on your credit history for six years no matter what you do. You will need to open talks with your bank. If you had loans or credit with the bank that was written off, it is possible that you bank will not want to re open an account for you, or will only open a basic account.
- If they take my ‘estate’ where and how will I live? It is very important to seek employment and make an effort while you are bankrupt. This is seen as part of the cooperation process. Finding employment will also help you support yourself. You will however, be able to keep the necessities that you will need to live on a daily basis.
There is a lot of debt help in the UK
Debt is never a pleasant position to be in. There is however a lot of help out there. Charities and companies that deal solely with debt and helping people get out of it. When we hear words like ‘bankrupt’ we tend to tag it onto people sleeping on park benches, but that couldn’t be further from the truth. Bankruptcy is just one of many ways to solve your issues with money!