Petitioning for Bankruptcy?
So, why would I petition for my own Bankruptcy?
After our first blog on the subject of the ‘B’ word, we have had a number of people looking for definitive advice on their positions, when to all intents and purposes they are ‘crippled’ with debt.
The burden of debt and the effect it has on people’s lives should never be underestimated. It usually affects mental health, relationships and we have seen many cases of physical harm and some unfortunate deaths.
As ever, if there is a difficult position to face, seek the facts and then take them on, we are here to help.
The Use of Bankruptcy:
Basically, Bankruptcy is there for two reasons, as explained last week:
- To recover a debts from someone, in excess now of £5,000, who hopefully has assets, and
- To protect yourself, when burdened with debt, from your creditors.
Why Would I Consider It:
Petitioning for your own bankruptcy, a Debtor’s Petition can be considered if you have no or few assets. Even if you own assets it still maybe the best way forward if you have insurmountable debt levels, that will not go away.
On a personal level typically those considering personal Bankruptcy and have reservations and fears have the following assets at risk:
- Equity in Home,
- A healthy income and
- Other assets, car, jewellery, investments to name a few.
Each and every asset has their own defining guidelines in terms of their treatment by the Trustee and as said in our last blog, a lot of myths exist, some from people who should know better.
Recently a client lost sleep for over 6 months when her legal advisor stated that in Bankruptcy she would lose her home without considering the facts. There was massive pressure to bear with this WRONG backdrop. These facts not considered, which can influence the outcome of Bankruptcy:
- House was in negative equity,
- Mortgage repayments were C£600 pcm, and
- The client had irregular low-income levels.
Getting the Right Advice is Key:
After liaising with and appointing Bell & Company, the house was not and never was under threat!
Any Trustee will be looking for assets to realise and if the income is greater than generous monthly needs, an Income Protection Order will be applicable. There are other facets to the job but that is it essentially.
If there is equity in a home and it involves a husband or wife that equity will be deemed to be equally split and the person facing the Bankruptcy, will need to ‘sell’ or realise their share. Very often this involves a purchase of the bankrupt’s share, by the family or others.
Matters to Consider:
There are many different matters in Bankruptcy that need to be considered obviously, each and every one specific to your individual case and it’s not a ‘stroll in the park’. However, we have helped many people through the process correcting the myths and incorrect advice on this very personal and emotional subject. Bankruptcy has been a relief to nearly everyone we have acted for.
A parting thought…….never underestimate the effects on health that debt pressure can bring. Arm yourself with thorough advice and most importantly know the facts, including the bad news.
Obviously, we can help and as ever offer FREE initial consultations on all debt issues, so call 02895 217 373.