Debt Consolidation Loans

What is bankruptcy?

Bankruptcy is one way of dealing with debts you cannot pay. The bankruptcy proceedings will free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are shared out fairly among your creditors. Anyone can go bankrupt, including individual members of a partnership.

How are you made bankrupt?

A court makes a bankruptcy order only after a bankruptcy petition has been presented. It is usually presented either by yourself (debtor’s petition); or by one or more creditors who are owed at least £750 by you and that amount is unsecured (creditor’s petition).

Bankruptcy petitions are usually presented at a county court near to where you trade or live or at the High Court in London.

What happens to my assets?

You will no longer control your assets.

You can keep the following items unless their individual value is more than the cost of a reasonable replacement: tools, books, vehicles and other items of equipment which you need to use personally in your employment, business or vocation; clothing, bedding, furniture, household equipment and other basic items you and your family need in the home. The Official Receiver or any insolvency practitioner who is appointed as trustee will take control of all your other assets on the making of the bankruptcy order. He will dispose of them and use the money to pay the fees, costs and expenses of the bankruptcy and then your creditors.

What happens to my home?

If you own your home, whether freehold or leasehold, solely or jointly, mortgaged or otherwise, your interest in the home will form part of your estate which will be dealt with by your trustee. The home may have to be sold to go towards paying your debts.

If your husband, wife or children are living with you, it may be possible for the sale in the bankruptcy to be put off until after the end of the first year of your bankruptcy. This gives time for other housing arrangements to be made. Your husband, wife, partner, a relative or friend may be able to buy your interest in your home from the trustee. Such a purchase would prevent a sale of the property by the trustee at a future date. Your spouse or any other interested party should be encouraged to take legal advice about the home as soon as possible.

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Bankruptcy is a lawful phrase that most of us have heard quite often. Many of us usually
think that a someone has happened to be broke when they are bankrupt, yet that is frequently
not nearly close to the truth. We have this predetermined idea that in order for us to be
bankrupt, we are careless and lazy. In the actual world, it can be one of the most
accountable things that anyone can decide to do when it is really required. It is not a
simple choice for any of us to choose, but it can be the most suitable for some situations.

When you decide to declare bankruptcy, what you will actually be saying to your creditors is
that you have no way to repay all your debt. You will have to announce bankruptcy through your
attorney. If it happens that your condition is a legitimate one, you stand a chance to be freed
of your debt. All the creditors that you owe money will have no right asking for it any more.
This can sound grand at first but it does have its downsides as well.

You should know one thing though; having a thing like a bankruptcy apearinging on your credit
report for the following 6 to 10 years is not going to be beneficial to you in any way. It
will show there in big, bold, red writing on your credit report for a long, long period of time.
Because of bankruptcy, you will have difficulty obtaining credit cards, loans or making big
purchases even though, these things may have pushed you to declare bankruptcy in the beginning.

If you can show that you are making some real effort with your monetary condition, you could
find it not as much of difficulty to obtain financing but not very much though. Nevertheless,
it is an excellent way to take monetary responsibility of your own life. Besides that, you will
feel a very large weight being lifted off your back.

Credit card companies and other creditors where you owe money actually do have the right to say
NO to your bankruptcy claim. There are certain circumstances when they will very likely do just
that. For example if you have just spent money on a vacation, purchased something expensive or
used a credit card when out of work, or spent money subsequent to consulting with an attorney,
you will appear distrustful in creditors eyes and will most likely be denied. It is always wise
to seek advice from an attorney or debt counselor prior to taking the plunge and declaring
bankruptcy.

Tags: loans, debt consolidation, finance, get out of debt, consolidation

Popularity: 12%