Bankruptcy Benefits
It can sometimes feel as though bankruptcy may be your only way out of debt. But there are alternatives out there, such as an IVA or Debt Management Plan.
You should always seek expert advice before you consider starting Bankruptcy proceedings. For help and information, please call our freephone number 0808 131 9101.
Bankruptcy Benefits:
- Once you have been discharged from your Bankruptcy Order, all your debts will be written off, and you should be able to begin your debt free future within 12 months.
(However this is not strictly true and you may end up making payments into the bankruptcy estate for an additional three years through a binding Income Payments Order which is issued by the Court, even though your bankruptcy order will have legally finished after 12 months.) - There will be no more phone calls or letters from creditors demanding money, as they will be dealt with by a third party.
Once you have declared yourself bankrupt, any assets will be sold to repay your creditors and your financial life will be subject to scrutiny.
In terms of solving debts, bankruptcy is an extreme solution, and is only suitable for debtors when all other options are exhausted. Always take expert advice from an Insolvency Practitioner.
Entering into an IVA may adversely affect your
credit rating for up to six years from the date of approval.
Your property will be protected within an
IVA but you may be required to release all or part of any equity during the
period of the arrangement.
Failure to complete the term of an IVA can
result in bankruptcy.
(In Scotland, a PTD is the equivalent to an IVA.)