Bankruptcy in England – What You Need to Know

No matter what country we’re talking about, it goes without saying that bankruptcy is a pretty painful decision that you will need to really be sure about before you take that plunge. You just need to make sure that you really have all of the right information before you make any type of decision. We know that if you’ve come to the point where you’re even considering bankruptcy that you aren’t doing this as an easy decision. it’s something that you really need to ponder carefully. Yet trying to find the right information online can be difficult as well. It’s a lot better to make sure that you have as much information as you can before you declare bankruptcy.

If you can afford it, hiring a solicitor specifically for the bankruptcy can be a good idea. This is a smart idea if you have assets of some kind. If you don’t have any type of assets, then you might be able to skip the solicitor and do it all yourself.

What you need to know first are the downsides to bankruptcy. Yes, we hate to start out negatively, but you have to know what you’re up against before you can think about anything else. It’s tempting to just push in and go for it, but the downsides can really push you out of the future that you’ve always wanted.

You have to know that even if you don’t hire a solicitor, you’re going to be looking at 700 GBP for your bankruptcy. It can be less than that, but you should budget at least that. And while you are bankrupt, you cannot apply for more credit in any way. You will have to wait some time before you can even begin to re-establish your credit.

Try to use this downtime as a way to re-establish your savings account and change your thoughts about credit. In fact, it’s been shown that people that don’t save really end up going beyond their current financial situation, causing them to end up abusing credit over and over again.

If you already own your own home, you might be required to sell it. Again, this is where the solicitor comes in handy — they can defend your assets to the fullest extent of the law.

Any luxury items will be sold off to satisfy your debts, and your car may be sold as well. However, there are ways to protect your car, especially if you must use it in order to continue working.

Business owners that declare bankruptcy will not be able to keep their businesses — the Official Receiver will close down the business, dismiss the employees, and sell off any assets that will pay those debts.

You also can’t keep your bankruptcy private. This means that anyone and everyone can see that you’ve filed for bankruptcy. If you’re the type of person that really doesn’t want that type of information broadcast, you could be dealing with a lot of inquiries into your life that you didn’t want. For example, if you go to apply for a job in the future, you will have to deal with the fact that employers will know immediately that you’ve filed for bankruptcy. This can affect whether or not you actually get a job offer from the organization.

You also need to make sure that you have enough cash for your expenses, because your accounts will be frozen immediately.

Now that you know the downsides, you might be wondering what the benefits of filing bankruptcy in England are. Well, there are several advantages to bankruptcy, even if it doesn’t seem that way at first:

First and foremost, you will not have to deal with your creditors. That means that you don’t have to deal with collection calls, and you don’t have to deal with wage garnishments and other collection attempts. You are also allowed to keep the essentials and a modest amount to live on. When the bankruptcy order is lifted, you can make a fresh start. This could be as short as a year.

To start your bankruptcy, you’re going to need to file it with the court. You must fill in a bankruptcy petition and a statement of affairs. On these forms you have to list all of your creditors, no matter what. You also have to give details of your bank accounts and building society accounts. There are spaces for other assets that you own, and you must list everything. If you hide anything, it is a criminal offense and you can be seriously fined or even put in prison — definitely not the way to a better financial life, that’s for sure!

Keep in mind that’s it’s always a good idea to keep copies of your completed petition and your statement of affairs because you might need them later when you go before the Official Receiver.

The court can decide at your hearing to approve your application (and thus create a bankruptcy order), or reject it. if they reject it, it’s not going to be the end of the world — it just means that the court thinks that you can do something different that might solve your debt problem better. If you are using a solicitor, they will be able to tell you whether or not you actually have a good case or not.

Bankruptcy does have a negative effect on your credit — your reference file will indicate that there’s a bankruptcy in your history for six years after the date your file the bankruptcy.

Keep in mind that this doesn’t mean that you can’t rebuild your credit — just remember that it might take a while for you to be seen as trustworthy again.

Overall, would we recommend bankruptcy? If you honestly feel that you have no other option, then going for a fresh start really isn’t a bad idea. Just make sure that you’re looking at all of your options!