Bankruptcy should be considered as a last resort,
when you have no disposable income to pay your
creditors. Whilst you are bankrupt any assets
that you have might be used to pay off your debts.
After a period of time all of your outstanding
debts are written off and you can make a fresh
start
Eligibility
A creditor can make you bankrupt if you owe £750
or more to that creditor and you have not been
able to agree how to repay the debt. You can
also be made bankrupt if your individual voluntary
arrangement fails.
Advantages
* Bankruptcy takes the pressure off you as
your creditors will not be able to chase you
once filed
* All of your debt will be written off providing you with a fresh start
* Any personal or occupational pensions you have should be unaffected
Disadvantages
* You lose control of all your assets which
includes them being sold to pay your creditors.
It restricts your ability to obtain credit in
the future without permission from the lender
and your credit rating can be affected for many
years after the annulment
* You cannot act as a company director or take part in the formation/management
of a limited company (without the permission of the court) and finally
you may not practice as a chartered accountant or a lawyer
* There may be a clause in any hire purchase agreements that you have
to terminate them if you become bankrupt
* There will be a fee to pay with your application
