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Help to understand bankruptcy.
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• Myth - If I go bankrupt I’ll be “blacklisted” for credit.
• You can have a VISA debit card even whilst you are inbankruptcy, so you can buy things on-line, in shops, pay billsetc, providing of course you have a positive balance on youraccount.
• Once discharged it is frightening how quickly some can getcredit again (if they want to) or get a mortgage, because bydefinition they have no debts.
• Myth - My employer will sack me
• There are very few professions where going throughbankruptcy will effect your employment (possibly accountants,bank staff etc.)
• It is your right to protect yourself from your creditors and isnot generally relevant to you employer. By contrast, beingheavily in debt can have an impact on employment as youmay be considered a security risk.
• Myth – My neighbours will know
• Your name and address will be published on the nationalgovernment insolvency website. If someone is minded to enter yourname they will find you.
• Bankruptcies are published in the local paper, but you have to workhard to find whereabouts in the paper it is recorded.
• There is no reason why your neighbours will be any the wiser, unlessthey have nothing better to do than search the internet and localpapers for your name.
• Myth – But it last for three years
• Your creditors have to stop chasing you as soon as you aredeclared bankrupt.
• You are usually discharged between 6 and 12 months from thedate of your bankruptcy. If you have disposable incomehowever, you will have to pay some of that to the OfficialReceiver for a three year period.
• Myth – I will have to pay it all back
• If you have no disposable (i.e. spare) income and noassets, then you pay nothing at all.
• Your unsecured debts (i.e. not the mortgage) are completelywritten off.
• Myth – I run my own business, I won’t be able to continue working
• Whilst it is true that you cannot be a company director whilstbankrupt (6-12 months) As soon as you are discharged youshould be free to become a director again.
• If you are a sole trader you will likely be able to continuetrading as long as you trade under the same name.
• Myth – I will lose my car
• So long as you can demonstrate that you NEED your car forwork, for visiting sick relatives etc. you will likely be able tokeep your car. (as long as it is not too valuable…take advicebefore entering bankruptcy on what is deemed too valuable)
• Myth – I will lose my house
• Not necessarily, it will depend on many factors. Do you ownyour home by yourself or is it jointly owned, how large is yourmortgage, what is it’s value, do some of your creditors havesecurity?
• You need to take expert advice when assets are involved. Youmay be able to buy back the beneficial interest in your homefor just £1. (take advice before bankruptcy)
• Myth – They will come into my house and take away my things.
• Nobody will enter your house, and your normal householdpossessions are not effected.
• Large assets will need to be declared and arrangement madewith the Official Receiver/Trustee as to how these will be dealtwith. (take advice if you feel you have something that wouldnot fall under the heading of ‘normal household possessions’)
• Myth – Taking yourself through bankruptcy is illegal and should be made an offence
• Going through bankruptcy, even for many thousands of pounds isnot an offence, and the Insolvency Service will treat you withcourtesy as long as you do the same to them.
• If you are insolvent, bankruptcy is not only not illegal, but may evenbe a legal requirement. It is illegal to continue taking out creditwhilst insolvent with no realistic means of paying it back.
• Bankruptcy – Just one of the many solutions that debtDr willrecommend and then assist clients with.
• We will always recommend the right solution for YOU theclient, and are happy to give advice if through no fault of yourown you find yourself in debt looking for the right way out.
• DARREN BROWN (debt advisor) call: 07934 461863
