Published in Debt Advice Features on Wednesday, August 24 2005

What is bankruptcy? Bankruptcy is a genuine solution for people who due to unfortunate reasons or unforeseen change in circumstances; there is no way in their current situation that they would ever be able to repay their debts or repay them over a reasonable amount of time. Bankruptcy will ensure that 100% of the debt will be written off after all your assets have been realised.

What is bankruptcy? Bankruptcy is a genuine solution for people who due to unfortunate reasons or unforeseen change in circumstances; there is no way in their current situation that they would ever be able to repay their debts or repay them over a reasonable amount of time. Bankruptcy will ensure that 100% of the debt will be written off after all your assets have been realised.

This sounds great, but, like so many things in life, it’s not as simple as that. Bankruptcy is seen as the last resort option and has a lot of stigma attached to it.

Don’t think about declaring yourself bankrupt if you think you may be coming into some money in the near future. You may be able to get full and final settlements from your creditors which could be significantly less than you owe.

Any assets of significant value such as any property, cars, shares, savings, personal pension policies etc. will be seized and any bank accounts, building society accounts will need to be closed and your credit and debit cards stopped.

If you own your own business it will normally be closed and any employees dismissed. It is illegal to carry on business under any other name from that of the one you were made bankrupt without telling everyone you do business with the name in which you were made bankrupt. In addition, you may be asked to leave any professional associations or societies that you belong to.

If you own your home jointly and have a family then you will normally be allowed 12 months to make other living arrangements while the trustee deals with your interest in the property. This may be offered to your partner of property if they can make a reasonable offer to your trustee. You cannot just transfer the property into your partners/friends/family members name at no cost, the interest will still be taken and can be seen as fraud; which will have serious implications against you. There is no way around bankruptcy regarding your assets and trying to save them from being taken in bankruptcy.

You may still be asked to pay an amount out of your salary each month for up to 3 years, which could result in you paying back more than you owed in the first place. Also if the trustee feels that you are in some way to blame for your bankruptcy then you may be subject to the restrictions of bankruptcy for up to 15 years.

There are a lot of companies that can advise you if bankruptcy is the best option for you, and it is advisable that you take every step to ensure that bankruptcy is the right course of action. There are many debt solutions that can assist you and allow you to have a bit more financail freedom each month, with knowledge that your debts are being paid.

Rachel Linster is the owner of www.ourbankruptcy.com a first class resource for bankruptcy information on the Internet.  Please visit for more about this article and related topics.