| |
Home/News Page
Using
Help To Get Out of Debt
Alternative Ways To Avoid A Payday Loan
Reducing Credit Card Debt
Do It
Yourself Debt Relief
Benefits & Drawbacks to Bankruptcy
More
Ways of Dealing With Debt
How
To Get a Low Interest Credit Card
Debt
Consolidation Tips
Living On What's Left
Money
Priorities when in Debt
Eight Common Mistakes That
Produce More Debt
The
ULTIMATE GUIDE to cleaning up your credit report
All
about Government Grants
|
|
Benefits
& Drawbacks of Bankruptcy
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 recognize 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 realizable 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 scrutinized.
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,
councilor 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
www.directonlineloans.co.uk website.
|
|
