10 Myths about Bankruptcy

Dodger61

Thought I would expose a few myths for those considering BR.

1) You will go to prison
BR is not a criminal offence. This will not happen, providing you havent done anything illegal. eg Fraud.
2) You cannot travel abroad if you are BR.
You can travel where you want.
3) You will lose your house.
Not necessarily. Options are available.
4) Your credit history will be shot to pieces.
Personal opinion........but if you are about to go BR, then it probably it is a mess anyway and you will not be able to get credit. Defaults stay on your credit history for 6 yrs, the same time as BR. So whats the difference?
5) You will be shunned by society.
Its only in your head that that happens. In real life, nobody really cares ( apart from your creditors! )
6) All debts will be written off when I file for BR
Not in the case of student loans, council tax ( in most cases ) and child support
7) I will never get credit again.
You can start rebuilding your credit file up after 6 yrs
8) Bankruptcy is easy
It aint! For most people it will be the hardest thing they have done in their lifes
9) The Offical Receiver will give me a really hard time
For the most part the ORs are nice people and non judgmental. They have heard it all before
10) My creditors will still chase me after BR
They cannot. It is illegal.

Have I missed anything guys. Please feel free to destroy any urban myths that are going about

nervousmother

They will come to my house and take my belongings
No! the OR is only interested in items of value, car, house, expensive jewellrey or antiques. They dont come to your home.

debts that cant be included: personal injury claim against you. Fines. and as far as im aware if you owe benefits that still has to be paid back. eg overpayment of tax credit.

Dodger61

Good one NM.

k2nga

Well Done Dodger maybe this when developed should become a sticky as i bet to alot of newbies to the forum it would be a great way of understanding that there are alot of myths out there when it come to Bankruptcy.

Holes_in_my_pocket

its a myth that you will go in paper and everyone will know ,, rarely goes in paper these days

debtinfo

Hi nm, Overpayment of tax credits is not a fine and is a proveable debt if you were given a notice to repay before the bankruptcy (collection of an overpayment is a different matter).

debt_doctor

A very good and interesting post, except........

Dodger61 wrote: »

6) All debts will be written off when I file for BR
Not in the case of student loans, council tax ( in most cases ) and child support

Council tax IS a provable debt, and 'advance' c/tax will go in until (for this year) March 2010 if you have been issued a final bill or liability order.

DD

nervousmother

yes but what if you were overpaid before BR but didnt find out until after discharge.. they ahvent asked for it back yet but you know they will..

debt_doctor

nervousmother wrote: »

yes but what if you were overpaid before BR but didnt find out until after discharge.. they ahvent asked for it back yet but you know they will..

The overpayment must have been identified before the date of the BR order. If this is the case then the o/p will be wriiten off on discharge but payments from ongoing benefit are still allowed up till discharge.

This includes all benefits such as tax credits, income support, nousing and council tax benefits etc.

DD

debt_doctor

12. You cannot have a bank account during / after BR. - COOP, Barclays, some credit unions allow undischarged BR's to hold an account

debt_doctor

13. All of your belongings will be sold to pay creditors.- Erm ...no ! All normal household goods are exempt as an asset such as tv's, DVD players, phones, cameras, furniture etc, and no one comes round to have a look !

DD