If you find yourself struggling in a financial hole, and you’ve tried everything else to build a ladder out of it, filing for bankruptcy is the final step. There’s no shame in having to file, it’s not a reflection on your character or your choices. After all, losses can come in many forms such as losing a job or making a bad investment. In today’s world we look for as many making schemes as we can just to survive, so when this goes wrong, it’s essential to know what to do.
Knowing what bankruptcy is exactly
Bankruptcy is a surefire way to clear any outstanding eligible debts that you absolutely cannot pay. On average, an official bankrupt status lasts for 12 months, and in this time your possessions, otherwise known as ‘non-essential assets’ and any excess income you don’t need to live off of are taken to pay your creditors. You’ll have to fill out an application if this is a personal choice, and your case will be judged as to whether it’s eligible for bankruptcy. This is a huge sentimental blow, and means you have to adjust your lifestyle completely. But this doesn’t have to be as hard as you think.
Where to look for help
Both online help and in branch help from your bank is available. Many companies have a website to hit up if you’re looking for bankruptcy help, which is a quick and handy solution if you’re weighing up the pros and cons over what will happen next. You will eventually have to go to court, and the lawyer’s fees are going to be an extra weight on top of everything else, but it’s the best course of action. No action against you can be taken until a judge has ruled in a creditor’s favour, so don’t be intimidated by the presence of a debt before that. Similarly, if your loan has been sent to a collection agency instead of staying with the original creditor, negotiation can be easier.
How filing for bankruptcy will affect you
At the end of your bankruptcy period, certain debts will be discharged, and others won’t. Your student loan will still be there if you have one, but this doesn’t have to be legally paid off until you’re earning £21000 a year. This isn’t likely to happen in the few years after your course. If you’ve been declared bankrupt, even after the period is over, it will remain on your credit reports for the next 10 years. This doesn’t have to be an underlining factor as mortgages can still be afforded to people who have so called ‘bad credit.’ Even after considering the lasting effects bankruptcy will have on you, you can breathe a sigh of relief for yourself due to some of the pressure being lifted.
Bankruptcy is a serious option, but life goes on even with the hard stuff in it. Eventually you’ll recover, and in the meantime friends and family are around for your to lean on.