The positives of the bankruptcy process

15 June 2014

  • You can literally get rid of all your unsecured debts immediately the order is made. This does not include secured debts like mortgages or any creditor already holding a "charge" on your home. Any existing court fines, family maintenance orders, benefit overpayments and student loans are also excluded.
  • A bankruptcy order will not affect any car finance or hire purchase contracts and it is normal to expect the finance company to seize back the products concerned.
  • "After acquired" assets (acquired after discharge) cannot be taken from you. There is no restriction on the amount you can earn, although you may be asked for some money each month if your income is higher than your reasonable living costs.(this is called an income payment order) The "Trustee" responsible for managing your bankruptcy wants you to work and if possible contribute towards your creditors.
  • You can operate a new bank account, but on bankruptcy you must advise and stop using your existing bank/building society, credit cards straightaway. Most banks will provide a basic service for bankrupts. Do not make direct payments to any creditors affected by your bankruptcy order.


Read part two of our blog series on bankruptcy: The negatives of the bankruptcy process

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