Considering how to go bankrupt may not be foremost in your mind, but if you are struggling to cope and still unable to meet financial obligations, it may be the only route left open to you. This is not something to be ashamed of. So many well-established businesses have been unable to make a profit in recent times and have ceased trading or gone into liquidation. Financially, it is tough today and if you are having sleepless nights due to the stress caused by money worries, bankruptcy may be the key you are looking for.
Contrary to popular belief, bankruptcy does not mean you will be permanently ostracized. However, it does have implications in the short term. For example, you will be unable to obtain a loan, run your own business or obtain employment in the local government. However, if your debts exceed your assets and you have no way of paying for them, considering how to go bankrupt may be beneficial for you.
There are two ways of being made bankrupt. You can apply for this yourself or a creditor can apply to make you bankrupt if you owe more than £750. If you are worried about the complicated procedures on how to go bankrupt, then put your mind at rest, as the bankruptcy procedure is fairly straightforward. If applying for bankruptcy yourself, you will need to complete a bankruptcy petition and lodge this with the court. This is then filed with the court and a court hearing date is then fixed where the petition will be considered and then either enforced or rejected.
If the court grants a Bankruptcy Order then it will also appoint an Official Receiver, who will take charge of receiving your assets to disburse. These will not include basic personal effects such as fridges, beds, television, etc. However, if you have a valuable television or hi-fi system that costs a lot of money, this may be taken in order to raise more money to pay off the debts. Your car may also be taken (if you have one) unless you can prove you need it for work purposes.
Once the Bankruptcy Order has been granted by the court, your assets will be shared between the creditors which refer to the people you owe money to. Within 21 days of the hearing, you will be required to submit a Statement of Affairs to the Official Receiver. It is at this point that there may be a need to call a meeting if there is more than one creditor to satisfy. The Official Receiver will decide how much to pay each creditor from the money available.
Once the Bankruptcy Order is in place then it lasts for 12 months and at the end of that time, it is discharged. All of your outstanding debts are also discharged – This is the ultimate good news you have been waiting for. You will still have difficulty obtaining a loan, in fact many banks will not approve any loans at all and bankruptcy will show on your credit record for 6 years after the discharge of the Bankruptcy Order. However, you will be able to build up your creditworthiness for the future.
Note that this is only a very short article covering how to go bankrupt and you should firstly take steps to satisfy that this is the best option available to you, as it should be a last resort.
