Bankruptcy could be suitable for anyone who owes a large sum of money and is unable to meet their repayments.
A common procedure for many people that owe a lot of money, bankruptcy will wipe away all secured and unsecured debts but is a serious procedure. In bankruptcy cases all assets owned by the debtor may be taken away by a trustee and their value realised. All values made from the sale of assets will be distributed between creditors. The debtor’s income is also scrutinised and a repayment plan is drawn up dependent upon what the debtor can afford to repay after normal household expenditure. At the end of the bankruptcy period (usually 12 months), the debtor is ‘discharged’ and the remaining debt written off.
Bankruptcy is legally binding with future consequences and should not be considered an ‘easy way out’. Being specialists in insolvency measures, and with a specialised bankruptcy team, McAlister & Co are able to look at the alternatives to an individual in a poor financial situation; an Individual Voluntary Arrangement (IVA) or Debt Management Plan may be better suited to your circumstances.
Any creditor to whom you owe more than £750 can also ask the Court to make you bankrupt, through a Creditors’ Petition For Bankruptcy. If a creditor is petitioning for bankruptcy against you and you disagree talk to McAlister & Co immediately. We will be able to give you professional advice on the correct actions to be taken.
Is Bankruptcy right for me?
Bankruptcy could be a suitable solution for debtors who owe more than £15,000 in debt (secured and unsecured) and are unable to meet their repayments. Bankruptcy may be the most appropriate option for debtors who don’t own their own home, or have accepted that their property will be sold in order to satisfy the debt.
- In most cases, bankruptcy will last for 12 months, which is typically a shorter period than an IVA.
- Large amounts of debt can be legally written off. After the debtor is discharged from bankruptcy, no more money is owed to the creditors.
- Bankruptcy does not have the same stigma attached to it as was the case historically.
- If you own your own home or assets, these will be sold to repay creditors.
- The debtors’ financial affairs will be scrutinised and full disclosure is necessary.
- A notice of the bankruptcy will be placed in the London Gazette and maybe a local paper, and the information will remain on your credit report for at least six years.
- Restrictions will apply for the period of bankruptcy and you may have to declare your bankruptcy to your employer or professional body.
How much will I have to repay?
This varies greatly and depends on your personal income and expenditure.