Pros and Cons of going bankrupt?

Crisp_£_note

I have been reading these boards but still confused sorry.

I am £15.000 in debt and am tempted at going bankrupt. My only income is benefits and I am struggling to keep on top of everything. It would only be me who claims as hubby (also in debt) is self employed and owns his business. We do have 2 joint loans so would leave them out of the bankruptsy and have to pay them myself with the money I 'save'.

Can anyone list the pros and cons of bankruptsy so I can see at a glance what benefits and restrictions I will come accross and experience as a guide?

Thanks

tigerfeet2006

Hi and welcome to the board.

First off you cannot leave the joint debts off. They automatically go into the BR whether you want to or not and become your OH's responsibility to pay when you are BR. Though what you spend your surplus on is up to you

You also need to get professional`advice from one of the debt charities. I f they suggest BR then we will help and support you through the prosess (links and no.'s in my sig and more in the Bankruptcy Help sticky.) You also need to do this as the judge can delay your petition if you haven't.

Have a good read of the Bankruptcy Help sticky and threads on the board and ask questions.


http://www.insolvency.gov.uk/bankruptcy/whatisbankruptcy.htm

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=01_bankruptcy

Useless_with_wonga

Hi,
You won't be able to leave the joint loans out of your bankruptsy your liability to them will be wiped when declared BR your OH will then become solely liable for them if he is not BR.
As for Pro's and Con's

Pro's= Your Debt/s are wiped giving you a fresh start.You will be discharged from BR within 12 Months.Even if you get an IPA it will end the matter far quicker than other options available.

Con's = Your OH will have to buy your share of beneficial in your home(assuming you are a home owner)
Your credit record is shot to bit's and will remain that way for 6 years.
You will always have to declare that you were a Bankrupt when asked on future applications for credit which has obvious implications if you want to remortage etc in the years to come. Some insurance companies also ask the question when applying for insurance cover:eek:
You MAY get an IPA if you have surplus income after essentials are paid. This usually lasts 3 years.
You MAY get a BRO delaying your discharge but this wil only be an issue if you have been naughty;) ( Gambling taking out credit you knew you could not pay back etc)
Dependant on the value of your car you MAY lose it.
You will lose any assets of value (over 1K)
You will not have access to "normal" banking. You will however be able to get a basic account (CO OP or Barclays) but you will not be allowed a Debit Card/Cheque Book/Overdraft.
No access to any credit over £500.
You will have to cooperate fully with the OR and have your finances examined with a fine tooth comb.
You will appear on the Insolvency Registar and have your BR published in your local rag and the London Gazette

I am sure there are other issues but having said that BR can be and is the correct choice for many people and exist's to allow people the chance to start again it does however come at a price.

philnicandamy

remember though a BRO/BRU does NOT extend the period of bankruptcy....you would still be discharged within 12mnths BUT you would have to abide by the rules of the BRO/BRU...and theres nothing stopping you applying for credit any ammount OVER £500 you need to inform the lenders of your bankruptcy (if you lucky to find someone who will lend cash in the first place...with the countrys current financial state)

Crisp_£_note

Thank you for the replies so far. In answer to some of the questions:


Spoke with CCCS and they advised £1 token payments (temporary measure until can increase finances) but I cant see my income changing in 6 months. Rely on benefits have a back condition prevents me working. CCCS didnt discuss any options for DMP as no surpless income.

Payplan gave me the idea of Bankruptsy (didnt speak at length just said looks like its your best option - do you want a fresh start?) but say they cant help just sent over forms via email and told me to see local Citizens advice. Infact Payplan did not give me any other options either,

I honestly can not see much altering in the next 6 years personall income wise. Can't see me in a position to be able to afford a mortgage (we currently rent), learnt my lesson on how to save for something I really want instead of getting it on repayment loan, am prepared to stick to whatever I have to do to get through the first 12 months clear and then 5 years beyond.

Nobody wants to offer me a loan or credit card anyway even before teh credit crunch. It seems however I try to get out of debt or deal with them it fails.

Will read the links I was given

I am so confused, frustrated and stressed I am going to blow a fuse soon :mad:
Need to make a decision as I am going round in circles and hubby has his own debts and he is getting defaults and final reminders at my witts end.

Thanks

tigerfeet2006

Another option for you if you have only £15000 in debts is a Debt Relief Order. This is due to start in April and you need to go to somewhere like the CAB for them to administer it for you.

http://forums.moneysavingexpert.com/showthread.html?t=1385275&highlight=debt+relief+orders