subject: Debt Problems Advice - Bankruptcy, what your options are [print this page] Debt Problems Advice - Bankruptcy, what your options are
Article by http://debtproblemsadvice.com
Filed under Bankruptcy
If your debts are causing you some financial hardship, it could be possible to obtain relief through bankruptcy. A bankruptcy is a binding legal answer for people who cannot pay their debts, or for those who are having difficulty managing their payments.
When a court of law declares that you are bankrupt, they will usually take possession of your assets to aid in paying off your outstanding debts. A bankruptcy lasts for about one year after which your record is cleared of all debt obligations.
Will the court take my Home in a bankruptcy?
Certain types of property are exempt from this and not considered as "assets." For example, some household items needed by you and your family can not classified as assets. Also tools and equipment needed for your employment is excluded. Although in some cases, it may be an option sell your home to pay off your remaining debts. The Official Receiver looks at your employment and other incomes to work out how much of your income should be paid to your creditors. In some cases, you may be required to sign an income payments agreement that will oblige you to make such payments for periods of up to three years.
If you happen to be the owner of a business, that business will be closed and the property the business owns sold to help pay off your debts.
What are Bankruptcy Advantages?
Once the bankruptcy is complete,, you are only then absolved of all your debts. However, you will still remain responsible for any debts created between the time of filing for bankruptcy and the dissolution of your debts.
Creditors should no longer chase or contact you, nor take any legal action against you.
The court will require you to pay as much as you can afford and no more. They will take into consideration your living expenses and employment.
A bankruptcy gives you the opportunity to start fresh and to begin building up a new credit clean record.
What are Bankruptcy Disadvantages?
You can lose much of your personal property, this may include your home.
All credit cards and bank accounts will be closed immediately.
Yyour financial reputation will suffer in the short term. The bankruptcy is publicised so you could suffer some public humiliation.
Credit wll be much more difficult to get after you have been declared bankrupt.
If you are an immigrant, bankruptcy can impact your status.
If you have to file for bankruptcy, you are best served by seeking out professional assistance from a company that deals with bankruptcy, there are numerous companies mentioned on this site. With the help these financial organisations, you can avoid problems that may cost you long term.
The court does not have to accept your bankruptcy petition. The court could decide that in your situation you are still able to pay your debts with court assistance. In such cases, they may recommend solutions to help you with your financial problems.
There are organizations like the Citizen's Advice Bureau and National Debt line that can provide debt management assistance to people. There are also some other legal options that one can take besides bankruptcy. For example, if you are on low income, you may qualify for a debt relief order.
