Bankruptcy Advantages

Sometimes bankruptcy can be your only option for some people, but there are a number of alternatives, such as IVA or Debt Management which you should consider before making your final decision.

Please see our website or call our free phone number, 0800 019 5870, for more information.
 

Advantages of Bankruptcy:

• All your debts are written off, and you should become debt free within 12 months thus giving you a fresh financial start.
  (However this is not strictly true and you may end up making payments into the bankruptcy estate for an additional three years through a binding Income Payments Order which is issued by the Court, even though your bankruptcy order will have legally finished after 12 months.)
• If you are in rented accommodation and have kept up with payments, then you will be able to live there and continue paying rent.
• Creditors are forced to recognise that they will have to accept less money than is owed, and once the order is made it will put an end to creditors’ phone calls and letters, as it is all dealt with by a third party.

Remember that once you have declared yourself bankrupt, any assets will be sold to repay your creditors and your financial life will be subject to scrutiny.

 

Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)