How will my bankruptcy affect my Spouse in UK

We people in UK think more about integrated family. We plan for things together with our parents, spouse or sibling. For we are one among married couple, we tend to plan our family expenses in accordance with combined salary along with earning of our spouse. This is a brilliant idea and we end up planning extravagant thinking of beautiful togetherness. We plan for buying car, houses or taking loans for family expenses. This is fine till everything is going as per vision. But at times, things go adverse.
What if you or your spouse becomes jobless and has loan or financial liabilities and obligations?
What if you or your spouse is unable to pay his/her debts and becomes Bankrupt?

When it comes to bankruptcy, the common belief is that this procedure is something that companies and businesses go through when they start having trouble and going deeper into debts which they cannot cover. But things aren't quite like this. Indeed, it is a solution for companies or businesses, but the bankruptcy procedure is actually used also for dealing with individual people’s personal debts.This procedure is an option you might find yourself needing to consider if you are insolvent, meaning if you have debts which you can in no way possibly repay.
Anyone can apply to the court to decide them bankrupt, not only companies, but also individuals, sole traders or partnership members. But it must be kept in mind that the procedures for companies and partnerships will be different from those for individuals or self-employed personas.
It is only a court of law that can declare you bankrupt, and also not every courts deals with bankruptcy cases. It can be a volutary decision you will be able to make, thus you can make yourself bankrupt by petitioning, or applying, to the court. Also, your creditors can usually do that for you, petition the court if you owe them at least £750. Afterwards, you are bankrupt once the court issues a bankruptcy order against you.
Bankruptcy fees and procedures you have to follow are different in states of UK and these are also different in Northern Ireland and Scotland.

The next step after this is that you have to hand over any assets of value and also you will have to cooperate with the trustee - a person appointed to manage your bankruptcy – and hand over the financial interest in your home. Your trustee will be either an insolvency practitioner, namely an authorised debt specialist, or an Official Receiver, an officer nominated by the bankruptcy court. Since appointing a trustee will take a bit of time, this Official Receiver will manage your bankruptcy at first. They will collect all information on your finances and will also protect your assets for your creditors.
Your finances will be gravely affected if you have joint accounts with a family member. If you are trying to help that family member build or rebuild a credit score might be better achieved by adding him/her ar authorized account user. Some accounts allow you to control and limit the amount of credit an authorized user can have access to. This also limits the amount you are liable for if he/she cannot pay. Also, if an authorized user declares bankruptcy, it will not appear on your credit report, although you will still remain responsible for any debt on the account. This also applies to any other assets you share property. If you have sole ownership over the assets being evaluated and taken in exchange for your debts, then this procedure will affect only you.
While your bankruptcy period lasts, you will find it very difficult to get a mortgage or any other form of unsecured credit. After you've been discharged it will become increasingly possible for you to borrow again. However, being declared bankrupt will damage your credit file. Even when you are discharged after 12 months, your bankruptcy record remains on your credit file for the afore mentioned six years, meaning that for this period it will prove very difficult for you to obtain further unsecured credit without being subject to higher interest rates. Despite the fact that there are an increasing number of adverse mortgage brokers willing to take a chance working with individuals who have been discharged from bankruptcy, you will still be unable to take secured credit at normal rates.
The entire bankruptcy process will affect your life, both professional and personal, since it will most definitely affect the lives of your family. In the case of a joint credit card, you can find yourself liable for the amount owed if the other cardholder declares bankruptcy. Discharge of it depends on the type of bankrutcy you declare and if your co-holder is your spouse. The UK law stipulates that only spouses can declare joint bankruptcy, which leads to that all of their accounts, both joint and individual, receive discharge. Thus, is a spouse declares individual bankruptcy, the joint account holders, inluding spouses, might have to pay.

Post a comment