Bankruptcy vs not paying-N2

In this difficult and trying economical times, and as hard you might have tried to avoid it, you found yourself in debt and, possibly even worse, in the impossibility of covering for your debts. As an UK citizen, there are a few options for you to explore, depending on each case in particular. It is prefferable for you to appeal to qualified money advisors, who, in view of your particular situation, will offer the best solutions to exit such a difficult situation.
From many points of view, filing for bankruptcy can be one's last resort. Bankruptcy is a legal procedure, ultimate 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 quite many restrictions and you will be considered discharged, or freed from your debts after a court established period of time.

Anyone is able 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.
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.

You might chose simply not paying your debts due to various reasons, be them 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 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 turn the bill over 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 try to arrange 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.
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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