Guide to Bankruptcy
Being a one parent family can be full of pleasures, yet now and again we have to deal with some downsides.
An example of this is debt and possibly having to use bankruptcy to deal with those debts. This guide has been written with one parent families in mind and provides a useful overview of bankruptcy and its effects.
Who is bankruptcy for?
Bankruptcy is for any individual who is unable to repay their debts. It does not matter whether your debts are joint or whether you owe a few thousand or a few million. If you are unable to repay your debts then bankruptcy may be an option.
What are the benefits of bankruptcy?
The most beneficial aspects of bankruptcy are:
- Wiping the slate clean. Nearly all debts can be wiped
- It only lasts for 12 months providing you co-operate
- Your creditors will have to deal with the Official Receiver administering your bankruptcy.
For one parent families bankruptcy can often provide the fresh start that is needed, though it is extremely important to understand the consequences.
What are the consequences of bankruptcy?
There are consequences to declaring yourself bankrupt, so make sure you know everything before going ahead. The main consequences of bankruptcy are:
- Losing assets of any value, though some assets such as household items are exempt
- Your family home is at risk but you may be able to arrange to keep it
- Some previous transactions may be reversed or altered, for example repaying family members prior to bankruptcy
- You may have to repay some monies for the next 3 years if you can afford to do so
- You will face problems obtaining credit in the future
- You will be subject to bankruptcy restrictions
- Your affairs will be investigated and the restrictions of bankruptcy could be prolonged if you are found blameworthy
- Bankruptcy will likely be a time of stress and uncertainty
Getting bankruptcy advice
Although bankruptcy clears your debts it is a big step to take. Make sure you get as much advice as you can. There are a number of online resources for bankruptcy including:
If you seek advice early then you will make things a lot easier for yourself.