Are you and your family living with debt that you cannot pay and finding it difficult to meet your essential living expenses as a result? Bankruptcy may be a sensible option for you to consider.

If the Government and official statists are to be believed the economy is now improving. However if you are like many normal people you are probably feeling no better off. Over the past few years you may have been forced to borrow just to meet your family’s monthly outgoings and as a result you are now struggling with the debts you have built up.

There are many TV ads offering high interest cash loans which may seem very tempting. However if you are already struggling financially borrowing more will often simply make the situation worse. You therefore need to consider a real solution to your debt problems.

We explain whether bankruptcy could be a sensible solution for you and how it could enable you to become debt free and give a fresh start for you and your family.

What happens to my debts if I go Bankrupt?

One of the biggest advantages of going bankrupt is that it will usually mean that a significant part if not all of your unsecured debt are written off. If you are unable to make any payment towards your debts then you will not have to and they will simply be taken away from you.

Your family income and expenditure will be considered and if you can afford to make a small monthly payment towards what you owe then you will have to do so. However the payment will last for a maximum of 3 years and then you will be debt free.

In addition to your debt being written off, your creditors will no longer be able to hassle you and all threatening letters and phone calls will stop. This aspect of bankruptcy will be really positive for your family life as all the stress of your debt will be taken away. You will then be able to spend more quality time with your family and less time worrying about debt.

BMD Tip: If you are struggling to keep up your mortgage payments you must understand that mortgage debt is not normally included in bankruptcy. However it will be much easier to keep up with your mortgage payments and repay any arrears after you are bankrupt as you will no longer have to worry about any other debt payments.

Do you want help to go Bankrupt? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Will we lose our family home if we go Bankrupt?

It would not be unexpected for you to think that Bankruptcy is something to be avoided at all costs. In fact this is not the case. Actually most of what you have probably heard about the downsides of this solution is not true.

One of the biggest worries people have is that they will lose their family home. The fact is that this is normally not the case. If you are renting your home it should not be affected at all.  If you own your family home but there is little or no equity in it then there will be little or no risk.

The only time when bankruptcy might cause you a serious problem is if there is significant equity in your home. If this is the case then you should not consider the solution without first taken advice from one of our advisers.

BMD Tip: If your property has little or no equity you may still need to buy back the beneficial interest in it to ensure that any future increases to the property’s value and therefore equity is yours to keep.

What does it cost to go bankrupt?

Despite the benefits of bankruptcy for you and your family one of the things that often puts people off is the up-front cost. At first you may think that you will never be able to get the required Court fee together especially when money is already tight. However there are some options which will help you find the money.

Firstly if you have decided you are definitely going to go bankrupt then you should stop paying your unsecured creditors. Put the money you would have paid them aside and save it towards your bankruptcy fee.

Secondly you should consider borrowing the money you need. If you have any credit left on a credit card or your bank overdraft you can draw this as cash. You could also take a small loan from a payday loan lender. The Court will not be frown on you if you use this money  to pay for your bankruptcy fees.

Thirdly you could consider selling an asset. One option is if you have a car worth over £1000 you  could sell this and buy one for less than £1000. Then use the excess cash to pay for your bankruptcy.

Where can I get help to go Bankrupt?

If you want more advice about bankruptcy there are several charities and the CAB (Citizens Advice Bureau) who you can speak to discuss whether it is the right option for you. However once you have made the decision these people are not normally able to guide you through the actual process.

If you are worried about going bankrupt yourself then you should consider our bankruptcy assistance service.  This is not free but will give you all the support you need when completing the bankruptcy application forms, going to the Court and having your interview with the Official Receiver.