What are the implications of declaring yourself bankrupt ?
Bankruptcy and your options
Sadly getting into debt is all too common these days. People will find themselves in debt for a number of reasons and may feel that their only option is to declare themselves bankrupt. However this is a big decision and not the only one available to you, so think carefully beforehand as bankruptcy can have many knock on effects.
What are the implications of declaring yourself bankrupt?
You will find that by being bankrupt there are certain careers that will no longer be accessible to you such as those in finance. You will also no longer be able to be a Barrister, Chartered Accountant or MP. Bankruptcy can also greatly affect your career in the Police and Armed Forces and you will not be allowed to act as a Limited Company Director without prior consent.
If you own or run a business then you will find that your house and/or car can be repossessed. You will also be unable to have savings during the time the bankruptcy order lasts. This will leave you in a situation where you are unlikely to be able to financially continue with the business.
Sadly you will also have to face the fact that by declaring yourself bankrupt this will be made known in the local paper.
Unfortunately you may find that finding employment can also be complicated as many companies will ask if you have been made bankrupt. This may also mean that the types of jobs you can apply for and any promotions will also be limited.
Other options available
You may think that declaring yourself bankrupt is your only option and it some cases it may be, but if you catch your debt early enough you may be able to find other ways of reducing debt. One such method is by setting up and an Individual Voluntary Arrangement (IVA) via an Insolvency Practitioner. This is a formal and legal agreement that often lasts 5 years between you and your creditors in which you can make reduced payments. After this time the debt is considered repaid in full.
There might be simpler methods of resolving your debt such as making a budget or cutting down or your spending.