Preparing for bankruptcy is a crucial step in the process. I have written this guide to hopefully explain some of ways in which you can help yourself. I have included some of the steps that I took as well as some other pointers and considerations.
As well as providing this information I hope to dispel some myths. As an example, consider your bank account.
Many people fear that they will be left without a bank account, or one that labels them as a person with bad credit. That is not true. Since insolvencies have increased a number of bank accounts have come onto the market. Did you know that some of the more advanced products offer facilities beyond basic banking?
Consider the Cashplus prepaid Mastercard. The benefit that it brings makes it an ideal product for bankrupts. It has all the usual banking facilities with the benefit of a Mastercard, credit rebuilder, cash back and short term borrowing facilities plus much more. You are guaranteed to be accepted for it. It is certainly worth a very good look in my opinion. For more information click through to my Cashplus page where I have detailed the facilities that it offers.
Many people know what bankruptcy is but very few realise what is actually involved. Wondering how bankruptcy can affect you and your loved ones can lead to a lot of stress and uncertainty for all concerned. This can cause many issues, particularly with family life.
By doing your research you can lessen the impact of bankruptcy on yourself and others.
It would be helpful for you to know how your assets will be dealt with before you go bankrupt. This is for two reasons:
The treatment of assets in bankruptcy can be complex. For example it may be possible to keep your car or your house. By the same token, they can be taken from you. If you know your rights you may be able to achieve a more positive outcome and communicate with anyone else affected.
To establish the treatment of your assets in bankruptcy you are best speaking to a professional.
As an example, consider your house. Your partner may have a beneficial interest. If this is not recognised in the conveyancing documents then it may be best to legally formalise this interest prior to bankruptcy.
As another example, consider a partner who is about to share the experience of losing the family home with you. It may be better to communicate with them and discuss the options as opposed to it being a nasty shock.
As another, consider your car. Are you sure that you are the legal owner of your car? During bankruptcy the car is one asset looked at carefully, usually because there may be some worth to it. If the car that you own is worth less than £1000 - £1500 and you need it for business or employment and you cannot rely on public transport then you should be able to keep it. If it is a £100,000 Porsche, there is a very good chance that you will not.
Whatever your situation you should know in advance what is likely to happen. There may be steps that you can take before bankruptcy but you must seek advice in order to ensure you do it correctly. You can get yourself into trouble if you go about it the wrong way!
Although most debts are discharged by bankruptcy there are some that are not. Ensure you know which debts will be discharged and which will not. You won't want the surprise of having debt after bankruptcy. For example, I still had £8,000 of student debt to repay.