Pros & Cons of Bankruptcy
Sometimes bankruptcy can seem to be the only way to get out of debt but there are a number of alternatives, such as IVA or Debt Management which you should consider before making your final decision.
Below lists the basic pros and cons of bankruptcy, but you need to seek expert bankruptcy help before you decide to declare yourself bankrupt. Debt Helpline may be able to offer you alternatives to bankruptcy, call us free on 0800 0481 778.
Bankruptcy Pros:
- All your debts are written off, and you should become debt free within 12 months thus giving you a fresh financial start.
(Although you may make an additional three years through a binding Income Payments Order which is issued by the Court.) - Bankruptcy will put to an end creditor phone calls and letters, as it is all dealt with by a third party.
Bankruptcy Cons:
- All assets will be sold to your creditors in order to meet your unsecured debt commitments, including your home.
- Any spare income will be paid to your creditors.
- It may hinder your future career prospects as some jobs won't accept bankrupts.
- Details about your Bankruptcy will be in the public domain.
- Your credit rating will take years to rebuild, as the bankruptcy order will remain on your credit file for six years.
- If you wish to gain credit in excess of £500 then you must declare that you have been made bankrupt.
