Is Bankruptcy Right for You?

by Startacus Admin
Becoming bankrupt can actually be a huge relief to some people with serious debt problems, but it’s not the right solution for everyone, especially as it can have long-lasting effects on your personal and work life.
If you’re wondering whether it’s the right step for you, a visit here should help you to work it out.
Bankruptcy may be right for you if:
-
you can't see a reasonable way to pay off your debts;
-
you don’t own much of any value and there’s no or very little equity in your home;
-
your situation isn’t likely to improve any time soon, and
-
you live or have a business in England or Wales, or you have done within the last three years and now live permanently in another EU state (Denmark excluded).
There’s no minimum amount of debt that qualifies for bankruptcy proceedings. If your unsecured debts are more than the value of your property, then it’s definitely a potential solution.
Bankruptcy may not be right for you if:
-
your debts are less than £20,000 and your belongings – other than household essentials and a vehicle worth less than £1,000 – aren’t worth more than £1,000 in total. In these circumstances a debt relief order may be more appropriate;
-
you’re a solicitor, an estate agent, an accountant or similar, as your professional association might bar bankrupt people from membership;
-
you want to keep your debt problems private;
-
your circumstances might improve in the near future; you may be waiting for an inheritance, or expecting a PPI pay-out, for example and this money can help you to pay off your debts, and
-
your pension pot is worth more than your debt.
Other things to consider
You need to think about the knock-on effects of bankruptcy before proceeding.
Can you afford the fee?
It costs £680 to file for bankruptcy, so you need to think about if and how you can pay this.
You may lose your home
If you own your home it may be sold to pay your creditors.
If you rent, you’re “safer” as long as your tenancy agreement doesn’t prohibit bankrupt people. You might find it harder to find a new tenancy as most letting agencies perform credit checks.
Future access to credit
Bankruptcy has a severe effect on your credit rating so you could face several years of difficulty when it comes to getting credit, a mortgage or running a business.
Your belongings
Anything you own other than essential household items and a vehicle that’s worth less than £1,000 may be sold to pay your creditors.
You’ll face other restrictions
After you’re declared bankrupt and before you’re discharged (this takes one year) you have to follow certain rules related to your work and financial life.
You still have to deal with debts that aren’t covered by bankruptcy
Some debts, like magistrate court fines and student loans, aren’t covered by bankruptcy and these creditors can still pursue you during your bankruptcy period. You need to work out how to pay these debts down.
Your bankruptcy will be public knowledge
Bankruptcies are listed in public records that can be seen by anyone. If you worry that you or your family could be at risk of violence if your details are published then you can ask for a court order to prevent it.
Subscribe to our newsletter
If you would like to receive our startup themed newsletter, full of the latest startup opportunities, events, news, stories, tips and advice, then sign up here.
The Yorkshire-based tech spin-out, FourJaw secures major funding to assist with developing its technological solutions for the manufacturing sector

The lowdown on Jack & Bry, the innovative London-based startup that makes a range of plant-based meats, all from Jackfruit

Week Gen-C is a week long calendar of events focused on entrepreneurship and careers, aimed at helping young people affected by the covid pandemic in the North West of NI

Leading startup community, YSYS launch 4 days of innovative online conversations and a range of new initiatives with the core theme of “Access”

Jean Gamester from Toastmasters International shares her tips on bringing back some of that old normal and staying fabulously virtually connected

Karakuri is a London-based startup that's using robotics to create innovative solutions for the catering sector

Planning to launch a fashion brand this year? Here are a few basic tips that will help you do just that and get your business off to the right start

Bippit is an online platform and app that helps companies to support the financial needs of their employees - not just via their salary

2021 may be a challenging time to start a business, but these tips should help you get it right...

Startacus and Hatch Enterprise celebrate International Women’s Day by partnering with NetMinds to bring together female founders for a virtual speed networking event
Published on: 7th January 2019
If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.







- FourJaw’s six figure venture capital boost 1st Mar 2021 The Yorkshire-based tech spin-out, FourJaw secures major funding to assist with developing its technological solutions for the manufacturing sector
- Week Gen-C to offer career and entrepreneurship respite to pandemic-hit youth 1st Mar 2021 Week Gen-C is a week long calendar of events focused on entrepreneurship and careers, aimed at helping young people affected by the covid pandemic in the North West of NI
- #YSYSAccessWeek: Building a diverse, inclusive and accessible tech startup ecosystem 28th Feb 2021 Leading startup community, YSYS launch 4 days of innovative online conversations and a range of new initiatives with the core theme of “Access”
- Startacus and Hatch Enterprise offer speed networking IWD-inspired event 24th Feb 2021 Startacus and Hatch Enterprise celebrate International Women’s Day by partnering with NetMinds to bring together female founders for a virtual speed networking event