Wiping out Debt using Bankruptcy

Bankruptcy should always be considered as an option of last resort, however in many instances this is a very good and practical solution. In many cases people can be discharged from bankruptcy within 6 to 12 months, although if you have disposable income then you may have a payment order applied to you for up to three years!

• If you have equity in your home you are likely to have to sell it but if you have children and you are maintaining your mortgage payments you will normally have 1 year - sometimes longer.
  
  
• If the trustee in bankruptcy is going to force the sale of the home, he has to do this within three years and in that time if property prices were to drop so that there was no equity and you were maintaining your payments then there would be no reason for the house to forceably sold!
  
  
• You should also be aware that items of value in your family home, other properties you own or assets such as a car can be sold, although you are allowed to keep a modest “runabout” or tools and equipment required for your trade or profession.
  

Bankruptcy does become one of public record and is advertised in the London Gazette and a small advert would be put in your local paper. This can be very humiliating albeit not many people will see it and of course it could affect your ability to get a job in the financial services sector and a number of other professions. It also stays on your credit file for 6 years.

If you are made bankrupt all your unsecured debts are written off and in practical terms it stops all the stress of those phone calls, letters and visits stone dead. Many people also feel a sense of closure or relief in that they can move on.

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