Disadvantages of going bankrupt, compared to accepting a Debt Management Plan,

andybartliff

I have a barely manageable debt, credit cards and overdraft, totalling£18000, and I am struggling to make all repayments as well as living a 'normal' life.
I accept that I am to blame for getting in to such debt, but have contacted 'payplan' to try to resolve my situation.
I am very impressed with them, certainly compared to a commercial company such as Clark Richards.
The advice is to apply for a Debt Management Plan, making agreements with my creditors and reducing my repayments. Their alternative suggestion is to apply for bankruptcy and they mentioned visiting Citizens Advice.
Could anyone outline the negatives of bankruptcy for me, please ? I guess things such as property and publicity may be involved.
Many thanks

North_East_Derbyshire_CAB

andybartliff wrote: »

I have a barely manageable debt, credit cards and overdraft, totalling£18000, and I am struggling to make all repayments as well as living a 'normal' life.
I accept that I am to blame for getting in to such debt, but have contacted 'payplan' to try to resolve my situation.
I am very impressed with them, certainly compared to a commercial company such as Clark Richards.
The advice is to apply for a Debt Management Plan, making agreements with my creditors and reducing my repayments. Their alternative suggestion is to apply for bankruptcy and they mentioned visiting Citizens Advice.
Could anyone outline the negatives of bankruptcy for me, please ? I guess things such as property and publicity may be involved.
Many thanks

Hello Andy

Have Payplan not outlined the pro & cons of bankruptcy for you?

It would be difficult to explain everything without knowing more about your circumstances.

You could try the link below to access further general information for now

https://forums.moneysavingexpert.com/discussion/1056083

Just make sure you fully understand all the options (including the pros & cons) available before making any decisions.

Perhaps you could try your local Citizens Advice Bureau or another free agency for a second or even third opinion

NED-CAB

alastairq

Could anyone outline the negatives of bankruptcy for me, please ? I guess things such as property and publicity may be involved.

As above...regarding publicity? This is not what it once was.....certainly, for England & Wales, publishing BR information in the local rags doesn't happen any more. Although there is a record of a BR, in perpetuity, in the London Gazette...but...how many friends & neighbours get that on a regular basis?

So, unless the BR comes across an organisation that demands information reference any BR petition, no-one 'should' know..or need to know.

With regards to property?

Well, the Official Receiver would seek to realise any assets for the Bankruptcy.

Especially bricks 'n mortar property.

However, this does not automatically mean homes are sold and the folk therein made homeless.

In general terms, a property would only have to be sold if....there was equity in the property, and the bankrupt's share of that equity came to more than £10,000 [as, I believe, the current cut-off figure is at?}.....and the bankrupt could find no-one prepared to buy the OR's interest.

Below £10k, and it appears that.....Official Receivers seek to place a Charge on the property...[which means, folk could continue to live there..as long as any mortgage is paid]

If the OR determines that there is no equity in a property, then the interest is vested back to the Bankrupt.

The Receiver has 3 years 3 months in which to decide what to do with a property....but in the latter case above, the BAnkrupt can arrange to make an offer to the OR to purchase the OR's interest..typically at present that seems to be about £1000 plus costs....which can be done almost immediately. This would protect the property for the BAnkrupt, from the effects of any future rise in equity.

However, as above, if after the appropriate time period no equity is identified, then the property simply reverts back for nowt.

A chance one takes?

Please bear in mind the above is a generalisation.