Bankruptcy Advice

Many people make the mistake of starting bankruptcy proceedings without seeking advice first. Whilst some do not seek bankruptcy advice and the outcome is as expected, others experience some nasty unexpected consequences and only wish that they had sought advice before going bankrupt. Bankruptcy advice is crucial even if you consider bankruptcy to be your only option.

Where can I get bankruptcy advice?

You have three options for getting bankruptcy advice:

• The free way, such as a charity
• A debt consultancy
• A legal professional

The one that you should choose will depend on your personal circumstances, you may wish to get free help from Mark as a starting point.

Why is bankruptcy advice important?

Bankruptcy advice is important because bankruptcy is a legal process and is little understood by most debt consultants. It is important to understand that your behaviour before and during your bankruptcy can affect the outcome.

Bankruptcy starts with you filing your bankruptcy forms at court, which are assessed by the Judge and will be used during the investigation into your affairs. Once the bankruptcy order has been made it will probably be too late to go back. Therefore it is essential that you seek bankruptcy advice for the following reasons:

• To make sure that it is your best option and there is not a more suitable alternative
• To make sure that there are no nasty surprises for you during the bankruptcy
• To know how to conduct yourself during the bankruptcy
• To minimise the consequences
• To remove the uncertainty

Is there bad advice?

Unfortunately yes. Many organisations do not provide bankruptcy advice because they do not profit from it. As a result you will only hear "Avoid bankruptcy at all costs". Even worse are the organisations that pretend to give bankruptcy advice and charge high fees. A number of companies have recently been closed down by the courts because of their illegal or unethical practices. Avoid these organisations at all costs.

How can bankruptcy advice help me?

Bankruptcy advice should prevent you from making comments such as:

• "I didn't know they would want money back that I paid to my family"
• "I didn't know that there are ways I could keep my house"
• "I didn't know that I couldn't do that, now they deciding whether to prosecute me"
• "Why has my discharge been suspended indefinitely?"
• "I never knew that they would want some of my income for 3 years"

Sadly these are not myths and they are heard regularly, usually because people do not find out until it is too late to do anything about it.

What does bankruptcy advice typically cost?

Be wary of paying high fees unless you are receiving specialist advice from an insolvency solicitor or a licensed insolvency practitioner. To receive advice on bankruptcy and have the forms completed for you expect to pay around £350-£500 but only use a reputable debt consultancy that has good knowledge of bankruptcy, not one that just pretends to. You may wish to start with free help from Mark, he can then recommend a consultancy or legal professional to you.

Is it worth paying for advice?

In many cases, Yes. The downsides of bankruptcy may mean that you need help, such as protecting yourself against claims on your property or accusations against you when your bankruptcy is investigated. Good bankruptcy advice will help you prepare for this.

How can bankruptcy advice help my associates and friends?

Under insolvency law it is not just you who may be affected by your bankruptcy. If reason exists they can be brought into the proceedings and may also be affected financially.

If this may be the case then getting bankruptcy advice and communicating with the affected party will probably go down better than a surprise later down the road, especially your immediate family who will already be sharing the uncertainty and consequences of bankruptcy with you.

What next?

You may wish to start by going to Mark's free help page.

How is bankruptcy advice different to debt advice?

Debt advice should climax with a recommendation of the debt solutions that are suitable for you. If your only option at present is bankruptcy then the advice will usually stop there.

Bankruptcy advice is different in that your suitability for bankruptcy will first be checked and then you should be advised on how you may be affected on the basis of the information that you will be submitting to the court. Most debt advisors do not truly understand bankruptcy.