Pros and Cons of Bankruptcy

At Express Tax Solutions we believe it is important for you to know the pros and cons of Bankruptcy and by comparing the two together and how it may affect your circumstances will help you gain a better understanding of the overall process.

Bankruptcy is often the last resort, and we recommend that you firstly consider an IVA which will allow you to continue trading whilst clearing your debt.

Pros

The advantages of bankruptcy are:

• You will be relieved from the pressure of dealing with your creditors.
• You are legally entitles to keep certain assets for you and your family such as household goods and a reasonable amount which you can live on
• The bankruptcy order is usually discharged after one year
• When the bankruptcy order is discharged, you are able to make a fresh start.
• Most of the money you owe will be written off.
• You are protected by legal action being issued from your creditors.
• The trustee in bankruptcy will deal with your creditors for you.
• This is your opportunity to make a fresh start.

Cons

The disadvantages of bankruptcy are:

• During the bankruptcy you cannot apply for any more credit
• If you are a home owner, it may need to be sold (but you can apply to your local authority for re-housing)
• You may be required to sell some of your other assets such as any luxury items you own
• If you are a business owner the Official Receiver may close down your business, and dismiss your employees.
• Your bankruptcy will be published in the London Gazette and maybe in your local newspaper
• Debts owed to the Student Loans Company are not written off
• You will not be able to be a director of a limited company.