What are the Advantages of Personal Bankruptcy?
Often seen as the fastest way to become debt free. The immediate advantage of personal bankruptcy is that it provides you with an opportunity for a fresh start. At the time of bankruptcy you no longer have any personal unsecured debts. The future is then yours to do what you want with. There are a few exceptions such as court fines, student loans child maintenance payments.
Even for those people who are asset rich, but who have greater personal liabilities, then bankruptcy can be the fastest way out of debt. You will need to be fully aware of the consequences of your actions if your circumstances are particularly complex, but we are happy to assist in getting to the bottom of the issue and providing options.
We often come across people who have submitted their own personal bankruptcy petition, then call us when they have a problem! The fact of the matter is that unless you know what you are doing, it really is in your best interests to seek professional advice.
- You no longer have to attend court as everything is submitted online. In fact, it is unlikely that you will speak with anybody face to face.
- All of your debt is instantly written off as opposed to other debt solutions which tend to keep creditors at arm’s length without actually getting rid of the debt.
- Bankruptcy lasts for a maximum period of 12 months after which time you are discharged. This compares favourably with Debt Management Programmes, where the principal debt is rarely ever paid off and Individual Voluntary Arrangements (IVAs), where you are committed for 5 – 7 years.
- You keep household possessions and personal effects
- You keep the tools of your trade
- Properties in negative (or even level) equity are no longer lost in bankruptcy which allows people to avoid the disruption of having to go into rented accommodation.
- On the other hand, those who choose to give up their properties are not liable for any shortfall once the property is repossessed and sold
- You can generally keep vehicles up to the value of £1000 provided these are required for work purposes. Higher valued vehicles may also be retained subject to negotiation and a probable (small) cash payment to the Official Receiver.
- There are no issues around obtaining a bank account.
- Your name no longer appears in local newspapers.
- Once you have entered into bankruptcy, Bailiffs are no longer able to collect monies on outstanding debts.