If you are deep in debt, you need to find a way out and do so as soon as you can. The longer you wait to tackle your debt the worse things will become and the harder it will be to clear your debt.
One option many people consider is using bankruptcy to give themselves a clean start. However, before filing for bankruptcy you need to consider the implications of bankruptcy.
Here we consider some of them, but your research needs to go further than reading this article. It is vital that you seek proper, tailored, bankruptcy advice from a qualified debt management specialist; they are properly equipped to answer all bankruptcy FAQs. However, here we will give you an overview.
Impact on Your Immediate Future
If you go bankrupt your savings, possessions, business and equity in your home will be used to pay the people you owe money to as part of the bankruptcy agreement. You could have to give up your home as part of the bankruptcy process. This will cause considerable disruption to your life and that of your family.
Your debts will be totally cleared by bankruptcy. However, for three years after bankruptcy some of what you earn will also have to go towards paying what you owed.
If you are a sole trader, you will normally lose your business. Starting a new business can, at first, be difficult for someone who has been made bankrupt.
Impact on Your Long Term Future
The bankruptcy order will remain as part of your credit history for six years. This makes borrowing money very difficult and extremely expensive. Even running a bank account can be expensive. Banks will open bank accounts for bankrupts, but most charge heavily for doing so.
Some public offices cannot be held by bankrupts. In addition, some professional bodies and licensing authorities will not endorse people who have been made bankrupt. This can restrict your employment options, but this is not normally a big problem for most people.
As you can see, filing for bankruptcy has serious consequences. Despite this, it can still be the best solution. Fortunately, filing for bankruptcy is not the only way of dealing with debt. A good debt management service will explain all of the options to you.
To understand the implications of bankruptcy visit the Debt Free Direct website. We have been offering a full debt advice service since 1997, so have the experience to help.
