If you are considering bankruptcy you need to know a few things about the process and how your home might be affected. Many people think that bankruptcy is the easy way out when actually it can become quite complex. However, it can be the best course of action for you if you are really struggling with your debts and see no other way of ending the situation.
When you declare yourself bankrupt your official receiver will have a look over your assets to see what can be used to pay back at least some of what you owe to your creditors. That might mean released any equity you have in your home. If you have more than £1000 equity on your house then the courts could order you to sell your home to release this. If you do not have more than £1000 equity then you will not gain anything by selling your home.
You could also sell a share of your property to friends or relatives and use this money to pay back your creditors. This will also mean that you do not need to move out of your home. If you have children then the courts will usually extend the amount of time you have to find a new home.
Your official receiver may also request you to sell your car if you do not need it for work purposes or if it is over a certain amount of money. This is all part of the bankruptcy process and it is important that you follow the advice of your debt management company if you are using one or your official receiver.
Using a debt management company throughout the bankruptcy phase is actually a very good idea and could help the process to go smoothly. Your Debt Solutions Scotland will also give you lots of welcome advice on what to expect during different stages of the bankruptcy process. Going bankrupt can be a lonely and daunting experience so it’s important that you get all the help and advice you need along the way.
It could work out that you don’t need to go bankrupt at all. By speaking to a debt advisor you might find that there is another debt management solution available to you that will avoid the need to go bankrupt. For example, an IVA could be a much better solution for you if you owe over £15,000 in unsecured debt. Why not speak to a debt management company today to find out more about the products they have available?
If you are struggling with debt and worried about how it will affect your family and your home, the best thing you can do is to seek impartial and free debt advice. At the very least, this advice will help you to prepare for bankruptcy and ensure you know what to expect along the way. You do not have to do this on your own.
This article is return by Keira Rose, on the behalf of Insolvency Scotland a Debt Advice Scotland Company.