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Bankruptcy

Holmes can also help you with going Bankrupt.

Holmes would prepare all the paperwork on your behalf and guide you through each step of the way. As bankruptcy is a last resort you may want to run through the advantages and disadvantages before proceeding;

Bankruptcy Advantages:

  • Bankruptcy will leave you completely debt free (apart from some debts which cannot be included like student loans)
  • The hassle will stop. Once your bankruptcy has gone through they are then legally not allowed to continue to hassle you for the debt
  • If you are a first time bankrupt you will be discharged from your bankruptcy within 12 months automatically.
  • You can continue trading as self-employed
  • If you are self-employed you will be allowed to keep the tools of your trade
  • If you have a car less than £2000, it should be ok to keep this
  • If you rent or live with parents or have no equity in your property then there is no risk of you losing your home or having to move.
  • If you have a property being repossessed or handing it back to the mortgage company, the shortfall and any secured debt that was on the property can be included in the bankruptcy.
  • If the debts are solely your responsibility no one else will be affected by your bankruptcy.
  • If you have failed an IVA or can no longer afford the IVA then bankruptcy could be an option.

Bankruptcy Disadvantages

  • You will struggle to borrow money in the near future, however you can credit rebuild once discharged from the bankruptcy and as with any mark on your credit files, after 6 years can be removed completely.
  • You will lose control of any assets that you own (house with equity, any savings or expensive vehicles)
  • You cannot be a director of a limited company or have any hand in the running or promotion of the limited company without prior permission from the bankruptcy court.
  • You cannot trade in any other business name unless you inform everyone concerned with your bankruptcy.
  • Professions that will be affected by bankruptcy are: Member of law society, estate agents, insolvency practitioner, stock broker, pub licensee, company director, charted accountant, lawyer, justice of peace, Member of Parliament and member of local authority.
  • If you have high disposable income then the official receiver could look including an IPA (income payment agreement) to your bankruptcy to pay some of the debt back, the monthly payments over 3 years would be distributed towards your creditors.