For some people, who have been hit particularly hard by the credit crunch, bankruptcy seems to the only way to go. If it's got to the stage where there is no possibility of repaying your debts, then it may be the only viable option.
You need to gather all your facts, details of all outgoings and debts and also whatever steps you have taken to alleviate the problems. Maybe your lender has already agreed to extend the period of the loan or even suspend payments for an agreed period, but things are not improving.
Your application for Bankruptcy will be dealt with via your local county courts and you will have meetings with your Official Receiver who will work out details of payments to be met as conditions of your bankruptcy order.
During the term of bankruptcy, which is usually for a period of one to three years, you will be classed as an un-discharged bankrupt. This effectively means that severe restrictions are applied to all your financial dealings. You will normally be required to make a payment each month to whoever is connected to your bankruptcy case. By following the guidelines which will be outlined to you by whichever officials are related to your case, it's possible to be discharged from bankruptcy in as short a time as a year, even if the payment period has not come to an end and of course the payments will still need to be met. If whoever is dealing with your case, normally the Official Receiver, is of the opinion that you have behaved irresponsibly or have been dishonest, then it's possible that you could have what is called a Bankruptcy Restrictions Order in place for anything up to 15 years, which would prevent you from being financially free during this time.
Upon being made bankrupt, you will be excluded from certain jobs for the term in which the bankruptcy applies. This applies to the role of a company director, a Member of Parliament and certain other professional organisations. Once you have been discharged from bankruptcy, this restriction ends.
In the long term, all your debts are written off and in the short term you will stop all the demands for payment of debts and collection agencies from harassing you about payments. If you are currently employed, then your job would not normally be affected in any way by the bankruptcy proceedings. If you were in the position of applying for a job, then obviously you would have to be completely open and honest in answering any questions regarding personal details on job applications.
To make a successful move onwards after being made bankrupt it's really important that you change your attitude to the management of whatever money you handle. In recent years people have been encouraged to get things now, pay later. Massive rises in property values made for the assumption that you could have whatever you wished for and the rise in the value of your property could eventually pay for everything. That's until people came to earth with a terrific bump and the credit crunch and ensuing downturn in the economy made everything come to a halt. It's a tough lesson to have to contemplate bankruptcy - it's stressful and embarrassing, but it can be seen as a fresh start and as millions of people will tell you, it's perfectly possible to dust yourself off and start all over again.
Are you embarrassed to be in debt? Do you wish that you could just "run away"? Well that's great, just run straight to the Run From Debt website. There you will find vast quantities to information about Debt Management Plans Debt Advice and Debt Help.
