With the ever growing debt mountain in the UK reaching melting point the decision to go bankrupt is at an all time high. Record numbers of insolvencies, particularly in the South East, are corroding the credit ratings of the nation. It is often presumed and publicly declared that there is little consequence to the individual who is made bankrupt, but in reality there are some scary facts that are not so well known and perhaps purposely hidden.
The most alarming consequence is a legal requirement to make payments after bankruptcy. It is frequently assumed all debt is completely written off when insolvency is processed, which does happen on occasions, however it is also possible for the Official Receiver (the financial organisation that processes bankruptcy) to claim up to sixty percent of income for up to three years after bankruptcy. Although most people are aware of the seizure of possessions and potential repossession of their property they are at times not informed of the further payments they may have to make.
There is also ignorance relating to the publicity of bankruptcy. Each times a person declares bankruptcy it is advertised in a local newspaper to inform people that they are not creditworthy. The County Court also holds the case file for up to twenty years, which enables potential lenders to contact the Court to make a judgement on whether they should lend to the individual or not. Remember it is the decision of the lender as to whether they lend someone money or not, discharge from bankruptcy does not mean the bankruptcy disappears it merely means the Official Receiver is satisfied with the winding up of the estate.
The discharge of bankruptcy is another sore point. Although it is stated it is attained after one year, it often takes much longer due to complications and it is the discretion of the Official Receiver as to when it happens. These are some of the many points that do not get disclosed to potential bankrupts’. With bankruptcies on the rise, people ought to be better informed.