"Bankruptcy is one of the
best known debt solutions, but is it the right solution for
We all want to ensure we receive the best debt advice so we can
make informed decisions. There are a number of different debt
solutions available across the UK. By understanding each debt
solution you're able to make a decision on how you wish to become
Bankruptcy is one of the most well-known debt solutions. As a
result, many people think they are bankrupt when they call our
charity. However, that's not always the only option. Most people
have two or three debt solutions which they could enter to resolve
debt problems. And, in other cases we tell people that bankruptcy
is not the right solution for them.
Is Bankruptcy Right For Me?
Bankruptcy is a solution to debt and money problems. But, many
people enter the solution unaware of the consequences.
When creditors are sending letters almost every day, the
telephone won't ringing with creditors wanting their money back and
you have no idea how to pay them, then the common response is,
"just make me bankrupt".
However, that's not always the best choice.
For instance, is it a short term problem, like being unemployed
for a few months? Do you have an asset which has equity in it? Is
the interest and charges the problem? These are all factors which
will determine whether bankruptcy is the best advice for you.
5 Things You May Not Know About
bankruptcy costs to enter the solution
Bankruptcy costs between £90 and £700 to enter, per person. This
is a fee you have to pay so you may have to save up money.
2. Bankruptcy lasts 1 year but you
could be asked to pay for 3 years
Being bankrupt lasts for 1 year and then you are discharged.
However, if you can afford to pay something towards your bankruptcy
then you will be asked to do so.
3. Bankruptcy will last on your
credit file for 6 years
Even after you've completed your bankruptcy your credit file
will be impaired for at least 6 years.
4. Your assets are reviewed in
If you have a property or a car then there will be a valuation
carried out to determine if there is any equity. In bankruptcy,
only your share of the equity can be taken for the benefit of your
creditors. So if it's a joint property the other owner would keep
their share of any equity.
5. Bankruptcy can affect your
It's imperative to check your contract of employment before you
enter bankruptcy. Some employers will dismiss their employees who
What Route Into Bankruptcy Should I
There are various ways to enter bankruptcy. The right route
matters because there is a cost involved. Furthermore, bankruptcy
is different in England, Wales and Northern Ireland compared to
England, Wales and Northern Ireland
Creditor bankruptcy: A creditor can make you
bankrupt. This means you don't have to pay the fees to enter
bankruptcy, however if you have an asset with equity then you may
DRO: A Debt Relief Order costs £90 and is for
specific people who can't afford to repay their debt. You have to
meet the strict criteria, such as the debt must be below
Court bankruptcy: If you don't qualify for a
DRO you will have to visit your local county court and submit
bankruptcy papers. This costs £700. If you are unemployed or earn a
low income, then this fee can be reduced to £525.
Creditor Sequestration: Your creditor can
petition for your own bankruptcy. This means you avoid the
bankruptcy costs, but your assets will be considered in the
Minimal Asset Process: If you meet the criteria
you could apply for the MAP route to bankruptcy in Scotland for
Certificate of Sequestration: Bankruptcy via a
Certificate of Sequestration costs £200 and is applied for when the
MAP route is not suitable.
Wednesday, April 03, 2013
Debt Support Trust