Bankruptcy Debt Solution
What is Bankruptcy?
People often think that bankruptcy is carried out by companies. However, this is not the case. Bankruptcy is used for resolving personal insolvency problems.
Bankruptcy is generally used as a last resort for dealing with personal insolvency when there is little hope of repaying any of the debt. An application for bankruptcy is made at the local county court. If granted, then all of the individual's debts are taken away from them.
The individual is usually bankrupt for 12 months. During this time, they are not able to act as a company director. Their assets are reviewed and anything of value may be sold to try and repay creditors. This does not include normal household items or tools of a trade. However, it would include a property with equity in it or a car valued at more than £1500.
If a person is declared bankrupt and they can afford to do so, they will be asked to make monthly payments towards their debt for up to three years.
Who Should Use Bankruptcy?
Bankruptcy is a serious matter. Before deciding to declare bankruptcy you should take advice from an insolvency experts such as Cooper Matthews.
You cannot continue to hold your position as a director of a limited company or be involved in the management of a limited company if you are bankrupt. As such if you want to remain in this position, then bankruptcy is not an option for you.
However, if your business has failed, you no longer need to be a director and you have no way of repaying the debts that you owe, bankruptcy could be an option.
You can continue to act as a self employed sole trader if you declare bankruptcy. As such, if you are unsure of your future income and do not believe that you can make any payments towards your creditors, bankruptcy might be a sensible option. However, this decision will also be affected by factors such as whether you own a home with equity in it.
If you have any assets which you use as tools for your trade (for example tools and a van), you will be allowed to keep these in bankruptcy so that you can continue to earn a living.
Note: The suitability of Bankruptcy to resolve a debt problem caused by business failure will always depend on the individual's circumstances. Before deciding that Bankruptcy is right for you, you must take professional advice.
Why not contact Cooper Matthews today for an informal discussion?