What Should I Consider Before I Declare Bankruptcy?
The decision to declare yourself bankrupt is a serious matter. It shouldn’t be made lightly, and not without extremely careful consideration and specialist advice.
You should also make sure you've explored all other options available to you - like a Debt Management Plan (DMP), an Individual Voluntary Arrangement (IVA), Re-Mortgage or a Debt Relief Order which may have less of an impact on your current employment and also wont necessarily put your family home at risk.
When is Bankruptcy My Best Option?
If you have absolutely no other way of negotiating with or paying off your creditors, and they have initiated debt collection activity against you, bankruptcy may be the most appropriate solution.
Always remember that you don’t have to make this decision on your own. There are many people that are there for you, to help ensure that the choice you make is the right one. Try our Debt Solution Finder to find out if bankruptcy could be the best option for you.
How Long Does Bankruptcy Last?
Usually you will be declared bankrupt and subject to restrictions for one year, but you may have to make payments towards your debts for up to three years.
Once your period of bankruptcy is complete all of your debts will be legally wiped and your creditors will be unable to try and collect any more money from you. Details of your bankruptcy will typically remain on your credit file for six years.
Will Bankruptcy Affect My Employment?
Certain areas of employment will be jeopardized by bankruptcy. Generally those working in a profession or in the financial or legal sectors may find adverse impacts.
Your bankruptcy may also affect you when looking for a new job in the future, as you may be required to disclose your bankruptcy on employment applications. Unfortunately, you may find some employers are hesitant to consider your application.
Might I Lose Any Possessions Through Bankruptcy?
It’s different for everybody. You may feel like a huge weight has been lifted from your shoulders, but it’s also natural to worry that bankruptcy may affect your life later on.
For example, finding a bank account may take some time and be very difficult to obtain. It might just be the case that you have to open a savings account first, and then wait a few months before you approach your bank about a current account.
If you want to buy a house after a bankruptcy, you may need to pay a substantial deposit on your mortgage. It’s also likely that you will face higher interest rates as lenders will perceive you to have a higher risk of default.