Drug testing

Benefits and Drawbacks of Bankruptcy

Outlined below are some of the benefits and drawbacks of bankruptcy. It should be noted that bankruptcy is not to be entered into without first having sought professional advice.

There is more to bankruptcy than as a way of finally putting an end to harassing debt collectors and creditors. One big side effect of bankruptcy being that your life is likely to be subjected to intense scrutiny.

These are some of the benefits of bankruptcy:

Relieves the stress caused by dealing with numerous creditors.

Once a bankruptcy order is made, a third party takes over the administration, decision making and payment process of the debts.

Creditors forced to recognise that they must accept less money than is owed.

Debtors typically pay less with a bankruptcy order than with an Individual Voluntary Arrangement.

Once discharged, most debts are written off and creditors cannot pursue them.

Here are some of the drawbacks associated with bankruptcy:

The debtor will lose any realisable assets of value.

If the debtor owns equity in a home, this will almost certainly be sold.

If a business is owned, this could be sold and any employees dismissed.

Bank current accounts can be difficult to obtain.

It is a costly process. All fees for the insolvency service, courts and any trustee are taken out of the debtor's assets.

If trying to obtain credit of more than ?250 the debtor must disclose his status as an undischarged bankrupt. The debtor must allow all his financial affairs to be scrutinised.

Names of those made bankrupt are published in the London Gazette and the local press and can be viewed online at the Insolvency Service website, making them accessible to anyone in the world.

Cannot hold certain public offices, such as MP, councillor or magistrate, or practice certain professions, such as solicitor and accountant.

A bankrupt may not hold office as a trustee of a charity or a pension fund.

A bankrupt is not allowed to be a company director or trade under any other name than the one used at the time of bankruptcy.

The trustee must be informed of any changes in circumstances during the bankruptcy.

Certain debts cannot be written off: fines, maintenance/child support payments, other family court orders, debts to secured creditors, debts from personal injury claims, debts incurred through fraud, debt arising from certain other orders of the criminal court.

Bankruptcy does not affect the rights of secured creditors. Where there are joint debts, creditors can still pursue the non-bankrupt debtor.

Bankrupts found to be blameworthy, culpable or dishonest can be made subject to a Bankruptcy Restrictions Order which can impose the same bankruptcy restrictions, plus some additional ones, for anywhere from 2 to 15 years.

You may freely reprint this article provided the author's biography remains intact:

About The Author

John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.

limousine chicago service
In The News:

Debt

We all know about debt. If you don't have too... Read More

Reducing Debt Before Its Too Late - How to Avoid the Pitfalls of Creeping Debt

Reducing debt usually isn't a high priority for people until... Read More

How To Get Out Of Debt

If you have found yourself in a position where you... Read More

Bankruptcy Reform: Designed to Protect Big Business

Who will benefit from the new bankruptcy reform laws? The... Read More

Credit Repair - Understanding The Basics

What is Credit?Credit means that you are using someone else's... Read More

Bankruptcy Interest Increases as Deadline Approaches

Congress recently passed sweeping legislation that will significantly reform American... Read More

5 Options Toward Debt Relief

If you are in debt, well over your head in... Read More

The Last Debt Solution Should Be Bankruptcy

A debt solution like bankruptcy should really only be used... Read More

Benefits and Drawbacks of Bankruptcy

Outlined below are some of the benefits and drawbacks of... Read More

Do It Yourself Debt Relief

With mounting bills and unforeseen hardships, you may be considering... Read More

Bankruptcy: What You Need to Know

Personal bankruptcy is a legal way to give people with... Read More

What Is A FICO Score?

Your FICO score or credit score as it's commonly called... Read More

Personal Bankruptcy: Last Option To Legally Stop Bill Collectors

Do you have stacks of unpaid bills?Are you in debt?Are... Read More

Start Small and Your Wealth Will Get Bigger

We've all heard the phrase, "You have to start somewhere."... Read More

New Bankruptcy Law ? Targeting the Wrong People?

Last April, President Bush enthusiastically signed into law the oddly-named... Read More

Bouncing Back from a CCJ

Should you be unfortunate enough to face a CCJ ?... Read More

Free Quick and Easy Money Saving Tips ? Part 1

With the high cost of gasoline and the amount of... Read More

British Families and Debt

There is current concern from the Bank of England that... Read More

5 Ways to Get Out of Debt

It has been said that everyday more and more people... Read More

How to Negotiate Debt Settlement

People over extend themselves financially as a result of a... Read More

How to Reduce Your Debt in 5 Easy Steps

If you have incurred substantial personal debt, consider these options:... Read More

Personal Debt Reduction Practices

Personal debt reduction practices, the steps people take to relieve... Read More

Five Hot Tips To Get Out Of Debt Forever

The financial and psychological burden of being in debt causes... Read More

Your Ticket Out of Debt Relief

If you are in debt over your head and wondering... Read More

Dealing with Thingitis

Debt is quickly becoming an epidemic in America. However, through... Read More

outdoor induction lights led street lighting retrofit Pete's produce ..