Thousands Now Get Out Of Debt Who Never Thought They Could

Bankruptcy can be a traumatic and distressing experience. The stigma that people feel when declaring themselves bankrupt can have a profound effect on their lives although the process of declaring bankruptcy can be much less difficult and stressful than many expect.
Bankruptcy is one of a variety of ways of dealing with debts that you cannot pay. A court will make a bankruptcy order once it has received a bankruptcy petition, most commonly submitted by an individual (although it can also be submitted by one of their creditors.)
What are the advantages of bankruptcy?
Kiran Mistry a leading Insolvency Practitioner says that the main advantage of a bankruptcy order being made is that it immediately stops the harassment you might be receiving from banks, lenders or other creditors. Any creditors must apply for outstanding monies through either the Official Receiver or an insolvency practitioner dealing with your bankruptcy order.
When a bankruptcy order is made all or most of the debt is generally written off. It therefore allows you the freedom to make a new financial start as the bankruptcy orders are ordinarily discharged after twelve months.
What happens to my assets?
In the event of a bankruptcy order being made, the control of your assets normally passes to the Official Receiver or other trustee (generally an insolvency practitioner). However, items that you require to carry out your job or trade (tools, vehicles etc) and essential household items needed for your family are ordinarily exempt and you are able to retain these.
Other assets are controlled by the Official Receiver or trustee and these are ordinarily sold in order to raise funds to pay the outstanding debts. These assets may include cars, jewellery or other valuable items.
What should I bear in mind?
Whilst there are some advantages to obtaining a bankruptcy order there are also many negative factors to take into account. Most importantly, your home may immediately be at risk. Unless you rent your home (in which case you will generally be allowed to continue living there) the home is considered an asset and therefore could be sold to repay outstanding debts.
Secondly, if an Income Protection Order is issued it means that monies can be deducted from your income for up to three years to go towards paying any outstanding creditors. Indeed, your employment prospects may well be curtailed after bankruptcy as there are various professions (such as the police and some financial roles) which do not permit individuals who have been bankrupt. A bankrupt is also prohibited from starting their own limited company or taking on a company directorship.
Most seriously for many, a bankruptcy order also remains on your credit file for up to six years. This will have a significant adverse impact on your ability to obtain credit, whether that is a mortgage, loan or credit card. In the event that you are accepted for credit it is very likely that this will be at significantly higher interest rates than an ordinary borrower.
Moe Nawaz a UK Turnaround consultant states that although bankruptcy is one route it should be remembered that there are many other solutions available if you cannot pay your debts. For example, it may be worthwhile considering talking to a "insolvency practitioner or a debt consultant", but most important of all never leave things till the last minute get expert advice when you know that you need to talk to an experienced professional who can advise you on steps to take in order to rescue your business. There are also alternatives including an Individual Voluntary Agreement (IVA) or a Debt Relief Order (DRO) which may be more suitable depending on your individual circumstances.
Kiran Mistry (Insolvency Practitioner)
Moe Nawaz (Turnaround Consultant)
Kiran Mistry and Moe Nawaz have a combined experience of over 30 years in the Insolvency and Turnaround business. They have helped and advised 10,000's of business owners in the UK.

Kiran Mistry (Insolvency Practitioner)
Moe Nawaz (Turnaround Consultant)
Kiran Mistry and Moe Nawaz have a combined experience of over 30 years in the Insolvency and Turnaround business. They have helped and advised 10,000's of business owners in the UK.