Bankruptcy FAQs

• Q: Does bankruptcy have lasting consequences?
• Q: Will bankruptcy affect my job?
• Q: Who would handle my bankruptcy?
• Q: Can I rely on advice from the Debt Advice Trust?
• Q: How can I be sure if bankruptcy is right for me?
• Q: How long will bankruptcy remain on my credit file?
• Q: When is an IVA a better debt solution than bankruptcy?
• Q: What if my circumstances change during bankruptcy?
• Q: Are all my assets sold off in the event of bankruptcy?
• Q: What do I do after filing my petition for bankruptcy?
• Q: What happens after my bankruptcy is discharged?
• Q: Will the same records be kept about me if I take out an IVA ?
• Q: If I declare personal bankruptcy but also own a business, what happens?
• Q: What if my combined assets are still not enough to pay off all my debts?

Bankruptcy FAQs

• Q: Does bankruptcy have lasting consequences?
  
  A: Yes it does. It can affect your future ability to obtain services from banks, credit card companies and others. But it's not all doom and gloom. Talk to us about your individual situation and we'll advise you on what your future options may be.
• Q: Will bankruptcy affect my job?
  
  A: In certain professions, you could run the risk of losing your job. And if you are self-employed, your business will be normally be closed down. You can start to trade again but will be subject to restrictions. You will also be barred from being a company director without court permission.
• Q: Who would handle my bankruptcy?
  
  A: The Official Receiver will act as your trustee in bankruptcy unless an Insolvency Practitioner is appointed. Your Trustee is responsible for looking into all your financial affairs and making a full report to your creditors. He or she may also make a report to court.
• Q: Can I rely on advice from the Debt Advice Trust?
  
  A: Absolutely. We do not depend on funding from lenders or banks and we exist purely to help people in serious debt. Call us and you will speak directly to fully trained experts with vast experience of dealing with debt problems and the various solutions ranging from bankruptcy to IVAs, re-mortgaging, debt management plans and more besides. Plus, you'll have the added reassurance of knowing that our advice is impartial and not guided by other interests.
• Q: How can I be sure if bankruptcy is right for me?
  
  A: This is a vital question. An IVA, or other debt solution, may be more appropriate for your individual situation, rather than bankruptcy. Do talk to us first. It won't cost you a penny and will help you make up your mind.
• Q: How long will bankruptcy remain on my credit file?
  
  A: Six years. If you apply for credit after that time, you may still have to declare that you have been bankrupt.
• Q: When is an IVA a better debt solution than bankruptcy?
  
  A: The simple answer is almost always, if an IVA really is an option for you. An IVA helps you avoid all the stigma and serious implications of bankruptcy whilst also taking care of all your debts. Of course you'll have to keep up your monthly IVA repayments, usually over five years, but these are specifically set at a realistic level you can afford.
• Q: What if my circumstances change during bankruptcy?
  
  A: You are legally bound to inform your bankruptcy trustees if your income increases at all during your bankruptcy. This includes any money left to you in a Will or a redundancy payment.
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• Q: Are all my assets sold off in the event of bankruptcy?
  
  A: Yes, with very few exceptions. That's why it's vital to talk with the Debt Advice Trust first in case an IVA or other debt solution may still be an option to help you avoid bankruptcy.
• Q: What do I do after filing my petition for bankruptcy?
  
  A: The Official Receiver will initially take over once a bankruptcy order has been made and handle all aspects of your bankruptcy, including liaising with your creditors. You will be under a legal obligation to co-operate fully with him or her.
• Q: What happens after my bankruptcy is discharged?
  
  A: You are free to apply for any credit or financial services you choose, although acceptance is not guaranteed. And remember, your bankruptcy will appear on credit searches for six years.
• Q: Will the same records be kept about me if I take out an IVA?
  
  A: An IVA is kept on your credit record for six years from the date of arrangement. It is also entered on the individual insolvency register which can be searched by the general public. What we can say is that it is not advertised in the paper and your employer is not notified unless you choose to tell them.
• Q: If I declare personal bankruptcy but also own a business, what happens?
  
  A: This applies if you are self-employed. Your business will normally be closed down and any employees will be made redundant. You will also not be able to be a company director again without court permission.
• Q: What if my combined assets are still not enough to pay off all my debts?
  
  A: Declaring personal bankruptcy will still clear all your debts and protect you from your creditors. Even so, it should only be seen as the very last resort.