Bankruptcy Pros and Cons

Bankruptcy Pros and Cons

Bankruptcy should be a last resort when you are facing debt problems.

You can call the Consumer Credit Counselling Service on 0800 138 1111 to find out about other alternatives. Should you find yourself in the situation of filing for bankruptcy, it is important to understand the pros and the cons.

Advantages

Disadvantages

Is there an alternative?

An alternative to bankruptcy is an Individual Voluntary Arrangement (IVA).

Definition of discharge

Being discharged from bankruptcy means that the bankruptcy order (made by a court) is lifted. All the restrictions (like having the trustee in bankruptcy control your finances etc.) are lifted. The bankruptcy remains on your credit record, but once you are discharged, you can resume normal activity, and your previous creditors have no further claim against you for those debts. (However, certain privileged debts are exceptionally not lifted - such as Student loans). Normal bankruptcies take 3 years for the discharge to come through, but the trustee may apply to the court for an extension if the trustee believes that circumstances warrant it.

Further information

The Debt Advice Bureau is an organisation advising about debt management, bankruptcy and IVA.

www.debtadvicebureau.org.uk

More information can also be found at
www.insolvency.gov.uk or through telephone enquiry
line 0207 291 6895