Bankruptcy is basically a formal repayment plan in which assets of the candidate used to pay off debts. If you are going to apply for bankruptcy then it is important for you to know about certain facts of bankruptcy plan. Basic things that you must know about this debt elimination option are:
- It lasts for a period of 12 months if other things are constant
- Most of the debts will discharge when bankruptcy period ends but there are restrictions on credit and certain profession works
- There will be an official receiver who will take care of your assets and find the reasons of bankruptcy
- Sequestration is an equivalent option for residents of Scotland
If you go through bankruptcy to pay off your debts then there will be certain negative impacts on your credit score. It is alternative of IVA Once when you declared bankrupt then you will no longer oblige for your outstanding debts. You will be free from any mental stress of harassing collection calls and can move forward for a fresh start. However, bankruptcy will ruin your credit score badly and gives some negative impacts on your financial status.
- Official receiver is authorized to sell your any asset including home, vehicle or households of excessive value
- If you apply for credit of more than 500 then you will need to mention that you are undercharged bankrupt
- You may not be able to work as company director
- You will need court permission before participating in promotion, management or formation of a limited company
- You cannot practice as accountant/solicitor
- Your bankruptcy information will available on insolvency register until three months when you get discharged
This way bankruptcy can affect you. It is not that bankruptcy is always bad. Go for it if other options are not efficient in your situation. But it is also important to consider other options if available there.