Disadvantages of bankruptcy
Bankruptcy is personal insolvency's "nuclear option" - a last
resort to debt problems. That's not to say it is not the right
choice for many - it often is (especially if you aren't a
homeowner). But, anybody giving bankruptcy advice will tell you life
won't be the same after becoming bankrupt - not least when it comes
to rebuilding your credit rating in years to come. To help you
decide whether bankruptcy is right for you, here's our guide to the
main disadvantages of bankruptcy:
- All your assets, apart from those required for a basic standard
of living, will be sold. This is likely to, after a year, include
- You will not be allowed to obtain more than £500 credit unless
you first disclose that you are bankrupt.
- Any income you have in excess of that needed for your basic
needs will have to be paid to your creditors. For more information
on this, read our blog about
Income Payment Orders and Income Payment Agreements)
- Your job may be at risk: certain trades and professions will
not allow you to work when bankrupt.
- Your credit rating will be affected (probably for some time
after your bankruptcy ceases) and there may be other restrictions,
such as having your bank and credit card accounts closed.
- Your bankruptcy will be advertised in newspapers.
If you've looked at the advantages and disadvantages of
bankruptcy it's worth taking our 2 minute online debt
test, just fill in a few details and online analyser will tell
you what the best solution to your debt problems is:
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