Bankruptcy v/s not paying

We are in difficult economical times. Earning and work prospects are reducing but expenses and losses are at all time high. In this hard and difficult time, even if we do your best still many of us may find our self trapped in high debts which we might never be able to pay. As a UK citizen, there are very few options to explore from but it is prefferable for you to appeal to qualified money advisors. These money advisors are highly qualified to handle debt scenarios and may offer you best solution to find an exit route in this difficult situation.

Knowing Bankruptcy
From various points of view, filing a bankruptcy may be a common last resort. Bankruptcy is a legal procedure and very procedural and structural way of dealing with debts you cannot pay. Your assets will be used to pay your creditors, namely, the persons you owe money to. You will be a subject to many restrictions and you will be considered discharged, or freed from your debts after a court established period of time.

Who can apply for Bankruptcy?

Anyone individual or company, sole traders or partnership members who is high debts and is unable to pay them can apply for bankruptcy in UK. 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 which declares you bankrupt, and also not every courts deals with bankruptcy cases. It can be a volutary decision you will be able to make. So, you can make yourself bankrupt by petitioning, or applying, to the court. Sometimes, your creditors can also do that on your behalf by filing a petition in the court if you owe them minimum of £750. If the court accepts your order they declare you bankrupt in UK court
Bankruptcy fees and procedures are different in different states of UK and these are also different in Northern Ireland and Scotland.

What happens once you are Bankrupt?

The next step after this is that you have to hand over any assets of value. You will also 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 initially. They will collect all information on your finances and will also protect your assets for your creditors.
If your assets are significant, it is likely the Official Receiver will recommend your creditors to appoint an insolvency practitioner as trustee. If that is not the case, then the Official Receiver will continue acting as trustee.

What if you are “Not Paying”?

You might chose simply not to pay your debts due to various reasons, be it personal or related to the quality of the product of the services you first acquired. Among these reasons you will find disappointment with the product, some warranty issues or poor service, but most often it is simply the result of lack of suficient funds.

Bankruptcy and your Credit Ranking
Bankruptcy always affects credit ratings and it may make it difficult to obtain additional credit for several years past de discharge term. But chosing not to pay a bill may also have negative effects on your future state. Besides overdue bills and notices demanding payment, creditors have the option to forward the bill to a collection agency. While there are laws to protect individuals from undue harassment, collectors can continually contact debtors, sometimes even by telephone, and also may eventually seek court assistance if the due payment is not received. By court order, even the debtor's wages could be garnisheed, meaning that the debtor's employer will be formally required to deduct a court-ordered payment from your paycheck. In the case of a mortgage, the bank may seek to foreclose, which can lead to another court order for the debtor to leave the property.

You, as debtor, should not ignore bills, but chose to talk to the creditor as soon as money problems arise. Creditors might agree by arranging an alternative repayment schedule and may even agree to reduce interest rates or refund late fees. The UK government and also some other not-for-profit agencies can provide consumer credit counseling, assisting you with creditor interaction and also debt consolidation.

Which is better? Bankruptcy or Not Paying

All and all, bankruptcy may not be the worst alternative. Individuals declaring bankruptcy may immediately begin to build better credit afterwards, while being faced with court-ordered garnisheed wages and other foreclosure procedures will definitely make obtaining better credit difficult for you for many years.

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