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Bankruptcy is a form of insolvency and it is often referred to as a ‘last resort’ because of the long term affect it can have. Looking for a suitable solution for your debts can be a daunting experience and many people who contact us have a lot of questions. Below are five of the most common questions we are asked.
How long will I be bankrupt for?Most people are automatically discharged from bankruptcy after one year. In some cases the Official Receiver will postpone the discharge due to on-going enquiries, for example where the debtor has not cooperated with them.
What will happen to my home?If there is equity in your property then the Official Receiver will look to release it. They will do this in one of three ways:
- Asking you to see if your family/friends can raise the equity amounts.
- Asking you to place your home on the market in order to sell.
- Obtaining an order for possession of sale.
If I go bankrupt how will it affect my partner?As long as you do not have any joint debts your partner will not be affected. However if you have joint unsecured debts the creditors will chase your partner for the full amount outstanding as you are both joint and severally liable.
How does bankruptcy affect my credit rating?The bankruptcy details will remain on your credit file for six years from the day the petition is granted by the court. This could result in you struggling to obtain any type of credit during this time; lenders generally check your credit report to help them decide whether or not to lend to you. You will also have a restriction placed on how much credit you can apply for during the Bankruptcy.
What debts are included in bankruptcy?Your bankruptcy will deal with all of your unsecured debts, such as:
- Bank loans
- Payday loans
- Credit cards/Storecards
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