You’ve been burdened with debt for years. As hard as you have tried, however, you simply can’t find an effective way to rid yourself of it. Perhaps you don’t have the income for monthly payments with an IVA or debt management plan, or you can’t scrape enough cash together for a full and final IVA. You’ve even considered debt consolidation loans, but no lender is willing to give you any money because of your struggles to pay off the debt you have.
You may have no other choice but to turn to bankruptcy.
While many are embarrassed at the thought of declaring bankruptcy, there really is no shame in it. Most of the individuals who are forced into this situation didn’t blow their money on frivolous items. Most are put in this position because of medical emergencies, divorce, loss of employment, or other financial situations that were out of their control. Bankruptcy provides them with a solution for getting rid of that debt and start over, fresh.
Before you can declare bankruptcy in England or Wales, however, there are a few things you need to know.
Declaring Bankruptcy in England and Wales
Before you think about declaring bankruptcy in England or Wales, you need to know how it works and what it does. Bankruptcy is a type of insolvency, and this means that in order to use it as a debt management solution, you have to have unsecured debts (credit cards, personal loans, overdrafts, and store cards) that are more costly than your assets. Assets can include almost any type of property, like your vehicles and home.
If your unsecured debt does indeed outweigh your assets, you will need to go to court and declare bankruptcy. Fees are involved, to the tone of £700. Most bankruptcies take about 12 months to complete, and once yours is complete, you will be free of your debt. You must obtain a bankruptcy order, however, before you are officially bankrupt.
Once you file for bankruptcy and receive your bankruptcy order, a few different things will happen:
- The bankruptcy will be placed on your credit report for six years, and financial restrictions will be placed on you for a minimum of one year.
- Your name, address, and information about your bankruptcy will be listed in the Insolvency Register. This register is available to the public online.
- Your bankruptcy will be advertised in the London Gazette. This is a trade paper that lists all insolvencies throughout the UK, whether they are individual or business related. Most often, however, you don’t need to worry about your friends and family reading this information, as it is mainly read by those in financial industries.
- Either an Official Receiver, which is a member of the bankruptcy court, or an Insolvency Practitioner, will act as a trustee over your assets and home interest.
Declaring bankruptcy may mean that you will need to sell many of your valuable assets, however you will not be forced to live on the street or give up the items you use from day to day. Bankruptcy can help you get rid of your debt quickly, and may be an effective solution if you are struggling with debt you can not afford.