Bankruptcy – Advantages & Disadvantages

Advantages

All debts taken away

All of your debts will be taken away from you and you will no longer be responsible for repaying them.

Discharged after 12 months

After twelve months you will usually be ‘discharged' from Bankruptcy, and the Bankruptcy restrictions will be lifted. Any money outstanding will be written off, except for Student Loans and non-dischargeable debts.

Household goods are safe

Even though your house and car may be at risk, your reasonable household goods are safe. - nobody will be knocking on your door to seize essential living goods.

Disadvantages

Bankruptcy is not private

Your name may be published in your local newspaper and the London Gazette advising of your bankruptcy.

Credit Rating is damaged

Your credit rating is significantly damaged; the record of your Bankruptcy will remain on your credit file for six years even though you are discharged from the bankruptcy after 12 months.

Lose control of your house and assets

You may have to give up control of your house and assets but reasonable household items and cars valued to a maximum £2500 should not be affected.

You may have to make contributions

You may be required to make a contribution from any monthly disposable income over and above £99 to the Court, usually for 3 years.

Not all debts written off

Not all debts will be written off by bankruptcy. Your student loan, as well as any fines, child support or maintenance and personal injury debt are amongst those debts which are not covered.