Effects of Bankruptcy

When thinking about the IVA alternatives, it is important that you think long term, therefore you should consider any effects of bankruptcy as they do not all disappear at the end of the Bankruptcy order, in fact the stigma and implications attached to bankruptcy can last for many years.

In the short term, bankruptcy means that you will not be in control of your assets, and you are only allowed to keep the essential items for home and work purposes, such as tools and furniture. Any other assets of value may be sold to raise money for your creditors to repay your debts, for example your home.  

If you ever wish to seek credit of more than £500, then you must declare that you have been bankrupt, and it is an offence not to do so.

Whilst it still appears on your credit file, it will make it extremely hard for you to get accepted for credit. But bankruptcy remains on your credit file for a total of six years (or more if you are subject to a Bankruptcy Restrictions Order), therefore it will hinder your chances of becoming a homeowner, as you will find it very hard to get accepted for a mortgage.

There will also be restraints on your career prospects too, as certain careers exclude bankrupts such as becoming an MP or joining the Armed Forces or Police Service.

Remember, there are a number of alternatives to bankruptcy, including an Individual Voluntary Arrangement. Please call our free phone number, 0800 048 1766, for further information.