Please note that if you are ever faced with the prospect of bankruptcy you should look at alternatives as soon as possible such as the Individual Voluntary Arrangement procedure (IVA).

Bankruptcy is a ‘last resort’ solution in cases of a very serious debt problem, and can be brought on by any creditor owed more than £750, or can be entered into by making a bankruptcy order yourself.

Except for certain exemptions, if you enter into bankruptcy, your assets will be sold and the proceeds used to cover part or all of your debt. The aim of bankruptcy is to completely wind up your financial affairs in order to realise all value in your assets, pay off as much of your debt as possible, and essentially ‘start again’.

Certain assets are excluded from the bankruptcy and include:

• Ordinary household contents.
• A modest motor vehicle.
• A residential tenancy.
• Items needed for your trade or vocation, for example tools.
• Any money you hold in pension funds.
  

Although any equity you have in a property will need to be realised as part of the bankruptcy, the bankruptcy trustee will be able to advise on how to avoid a forced sale, such as selling your share in the property to a partner or family.

If you own a house with no equity, you will still be advised to sell your share, as if the equity in the house rises in subsequent years, even after your discharge from bankruptcy, the trustee could then seek the full value for your interest.

If you have surplus income (after living expenses for yourself and dependents), you will be required to make contributions, usually determined by the court. If your circumstances change for the better during your bankruptcy, such as an inheritance, then this money will also be available to your creditors.

Providing you have not been made bankrupt before, your bankruptcy will end (you will be ‘discharged’) after 12 months, after which you will be free from debt and no further action can be brought by your creditors, although you may still have to make payments from your income for a further 3 years.

There are certain exceptions to this, for example you may still owe any unpaid court fines and student loans. The trustee will still be able to take action to sell your house if equity rises significantly, and the trustee will retain this right indefinitely.

The bankruptcy will remain on record at the Land Registry and with credit reference agencies, although you will no longer be declared bankrupt.

• IVA -The details are entered on a public register but there are no press or public notices.
• Bankruptcy - The details are advertised via the press and public notices.
• IVA - Current and future assets are safe as long as the terms of the IVA are met.
• Bankruptcy - If you are made bankrupt you risk losing your current and future assets. Leased or hire-purchased goods will be returned.
• IVA - There are no restrictions on business interests or future credit.
• Bankruptcy - You are restricted from continuing business in a name other than the one for which the bankruptcy was issued unless all creditors are informed. You are also restricted from acting as a director, starting, managing or promoting a company without the consent of the court, and from borrowing over £250 without disclosure of your bankruptcy.

Debt consolidation is the process in which debt is restructured into one low affordable amount which you agree to pay. At DebtFC we offer a range of debt consolidation options Scottish protected trust deed, individual voluntary arrangement (I.V.A), remortgage, debt management plan, homeowner loan, sell and rent back or perhaps bankruptcy (sequestration in Scotland) our experienced debt consolidation team, will discuss your options and provide you with free debt help and debt advice on how to deal with your debt problems. We are based in Livingston, West Lothian, Scotland but help people throughout the UK.

If you recognise any of the following symptoms... then you need our debt help!

Credit card debts, missed loan repayments, creditors phoning, debt collectors, bailiffs, County Court judgements, bankruptcy, insolvency, mortgage arrears, repossession, robbing Peter to pay Paul, not opening the mail, afraid to open the door.
Our debt consolidation team will show you the options that you have available to get out of debt with one reduced, affordable monthly payment. For a NO OBLIGATION, FREE CONSULTATION, call or send the contact form for some friendly, free advice.