The mere mention of the word bankruptcy can send shivers down a person’s spine. It’s not a pleasant subject. But, it is important to be armed with the facts. In some circumstances, having a well-rounded, unbiased view of bankruptcy and all that it entails is vital. After all, knowledge is power.
Bankruptcy can be a difficult time. But, being aware of the laws that surround bankruptcy is vital to making the right financial decision for you.
What is Bankruptcy?
In the main, bankruptcy is insolvency. This means that if you cannot clear your debts, you can apply for bankruptcy and have your debt cleared. But, this doesn’t mean it is the easy option to take. Once you file for bankruptcy your assets can be taken away from you. You won’t be able to obtain credit. But, you will also have to pay for this service. It can cost up to £700, so you need to think carefully if this is truly the ideal solution for you.
What Happens Next?
Once you have decided that this is the route for you, and you have no other alternative, such as an IVA, you will file for bankruptcy. Your local court will be able to help you with your need to file a bankruptcy claim. This is a legal requirement. You will need to have this enshrined in law to help you with your financial difficulties. A hedge may request to see you in some circumstances. However, this is not conducted in public. This is done in an informal, private meeting.
Lexis Nexis Legal Research has stated that you will have to seek out the advice of the Official Receiver. This means that your application for bankruptcy will be approved, or not, by this official. The officer who handles your case will assess your finances. They have the right to deal with your assets when you file this kind of claim. You may have to pay for this service, so do be aware of the ongoing costs of bankruptcy.
In some situations, you may be told that you cannot file for bankruptcy. If this is the case, you will be asked to budget your finances accordingly. There are services to assist with this. What is more, after a financial assessment, you may not have your total debt cleared. You may be required to pay some of the money back.
Bankruptcy is not clear cut and should always be used as a last resort. Bankruptcy laws are not entirely clear either.
Let’s find out more about bankruptcy laws.
In 2005, more strict laws were introduced. This meant that declaring yourself bankrupt has become more difficult. You cannot simply declare yourself bankrupt and start again. Up to 3% of people are refused bankruptcy. So, it may be worthwhile investigating other options such as IVAs and debt consolidation. Should your appeal for bankruptcy be successful, you will need to attend a credit counselling course. You must also attend a financial management course so that you can manage your finances more accordingly in the future. This is enshrined in law, and you must attend these classes.