Bankruptcy can have serious consequences and if you are considering whether
becoming bankrupt is the right option for you, visit the citizens advice bureau
for more detailed advice.
Dealing with the aftermath of Bankruptcy
Becoming bankrupt can be a complex process and the repercussions of this can last a long time even after you are no longer bankrupt. It is never an easy decision to make and as such is normally fraught with a significant amount of stress and anxiety. Sometimes Bankruptcy is the best option as it may provide an end to significant money-related stress that you may currently be experiencing.
The first thing you must do is know where you are.
Things may seem hopeless and irrecoverable but unless you make a list of your financial obligations and circumstances you cannot make a plan to get out of the mess.
Get a sheet of paper and draw a line down the middle. Write up all your expenses arising each month on the left and the debts you know you owe and on the right write down the things that are going to help pay towards those liabilities such a monthly salary, dividend income, assets you own etc.
Sometimes and very often, refinancing is a better option than bankruptcy as perhaps it’s just a timing thing you’re experiencing at the moment. Maybe all your monthly outgoings are squeezing you too hard and you just need to create some slack where lower payments over a longer period to repay plus a little bit of surplus cash to play with could be just what you need. The problems arise when you have no ability to access any refinancing options because of a bad credit history or rating or non-qualification for borrowing purposes.
There are organisations out there who can help you and their assistance is usually free. They can create arrangements with your creditors such as banks and creditcard providers so that they will back off and stop sending you those nasty letters that just seem to make the situation worse. Payplan is one organisation that comes to mind.
You have to realise that the bankers and credit card companies are businesses and like any other business they want you to buy their products and also set aside huge sums annually as a provision against bad debts like yours. It doesn’t really mean that much to them unless the loan figures are huge as they’re all provided for in their accounts. Nobody is going to want to try and take your house away from you for a £500 debt. You just get a body like Payplan or the Citizens Advice Bureau or one of the many Credit Unions that have popped up to take on your case and act as intermediary for you.
Personal bankruptcy should be a last resort and should be avoided if you are a home-owner because you can lose it if the odds are stacked against you.
If you’re going through bankruptcy then it also places a great strain on you and your family. Try to avoid the usual pitfalls which will make a situation much worse like taking drugs or alcohol to cope or gambling or excessive binge spending just to try and make yourself feel better but that will make your overall situation worse.
To summarise, write down what your known problems and liabilities are. Show what good things you have that you can use to counteract the bad things and at least you’ll have a grasp of reality and can effectively convey those concerns to any professional adviser you may turn to for help.
Disclaimer: The information on this website is provided for informative purposes
only and does not constitute legal advice. Please seek the guidance of a financial adviser or debt professional.