You will probably never know the true effects of bankruptcy until it is over and you have had time to reflect under normal conditions. Most people consider the effects of bankruptcy to being financial in nature, which clearly shows that bankruptcy is a very misunderstood debt solution.
Bankruptcy can affect you socially, financially and legally. This is something often missed by many advisers, mainly because they have never experienced bankruptcy. Although this page cannot tell you how the effects of bankruptcy will impact your life, it will hopefully provide you with an insight to how you may be affected.
If you would like to know how bankruptcy affected me then please feel free to read my bankruptcy blog.
If you live with your family then debt may have already had a detrimental effect on family life. Bankruptcy can further fuel this due to the uncertainty that it can present. Not knowing what is likely to happen or any nasty surprises during the bankruptcy can add to the pressure already felt.
Luckily there is something that you can do about this. By seeking advice in advance of your bankruptcy you will be able to fully understand the possible effects of bankruptcy and communicate them to your family. This will keep them in the know and avoid fuelling further detriment to your family life.
You may wish to visit the social page which provides information on where to can seek support for social related issues.
Many people worry about the stigma of bankruptcy and how their friends will think of them. For some people the effect of publicity is very worrying. Advertised in the London Gazette and possibly a local paper people worry that the bankruptcy may be picked up by someone they know. Although unlikely, the possibility of someone seeing is still a worry.
All of the effects of bankruptcy can be too much for some people, sometimes culminating in problems such as stress, anxiety and depression. It is important to realise that bankruptcy can be a stressful time, which is often made worse by the uncertainty that bankruptcy brings. The key to tackling bankruptcy is to seek advice as early as possible, this will help remove the uncertainty and prepare you to get on with the rest of your life.
Financially speaking bankruptcy will wipe your debts, though don't expect a complete fresh start. If you can afford to then you will be expected to contribute to your bankruptcy debts for a period of three years.
Further to this you will lose control of your assets and they may have to be sold, clearly losing your home will present problems for the whole family. For more information, go to the bankruptcy consequences page.