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PROS AND CONS OF BANKRUPTCIES UK
Before plunging high into studying the pros and cons of bankruptcies in the UK, bankruptcy is a complex and often misunderstood topic, and navigating the pros and cons can be a challenging task. In this blog, we will look into the complexities of UK bankruptcy laws, exploring the potential benefits and drawbacks. Whether you’re considering bankruptcy or want to understand the process better, you will find out about different aspects of bankruptcy
Bankruptcy explained in simple words
Bankruptcy takes place when you are unable to pay your taxes and liabilities. As a result, the authorities will take your valuable assets for clearing out the debts. In our society, we always think of this as the most tragic thing that can happen to a person. However, it is not the exact case every time. Sometimes going bankrupt can become a life-changing decision for a person.
Pros of bankruptcies:
- Debt Relief: Although you might lose some valuable assets, it will reduce your burden by clearing your debts.
- Peace of mind: After clearing out your debts, you don’t have to worry about those stressful calls from creditors any more. It will provide you with a sense of freedom and calm your mind.
- Legal protection from the creditors: The creditors cannot take any more legal actions to recover their money. After declaring yourself bankrupt, you save yourself from further verbal abuse.
- Restart: Now, you can start fresh with full energy. Moreover, you can work more efficiently in your job, and if you are a business owner, it can provide a good head start for your business.
Reach out to our team of experts for free assistance with your accounting needs. We have been through the worst bankruptcy cases and want nothing more than to help you stay up-to-date on any changes that may affect how things work financially in order to prevent them from going down too soon.
Cons of going bankrupt:
- Fee for filing bankruptcy: Every facility comes with a hidden price; even after losing your valuables, you still have to pay a fee of 680£ to file your application.
- Loss of valuable assets: Although bankruptcy provides help in clearing out your debt, it also takes away many of your personal belongings, such as your car, computer and others. The experience of losing all of your precious belongings is quite painful.
- Impact on credit score: It took almost six years to recover from bankruptcy in the UK. Bankruptcy impacts your credit rating drastically, and it becomes tough to take a loan because of this.
- Further charges: When you file for bankruptcy, all your earnings and necessary income will be looked at concisely. If you have extra money of more than £20 per month for the next year, you may be asked to pay your debts every month for the next three years.
We discussed the positive and negative aspects of going bankrupt. We are sure many of you are curious to know how bankruptcy works. Now let’s discuss the process behind bankruptcy.
The working procedure for bankruptcies
In the United Kingdom, the fee for filing a bankruptcy application is about 680£. Along with that, you have to provide certain kinds of documents as well to carry out the procedure.
If you have money saved in your bank account, it is good practice to take it out before filling out the application.
It is not the only way:
Well, bankruptcy is not the only option to clear out your debts. There are undoubtedly more ways which can be helpful regarding this process.
You can go for a debt relief order or consolidate your debt orders. Apart from that, you can take our valuable suggestion on what’s going to be the best option for you right now. Whether you should go bankrupt or not.
Consult us immediately to get the best options for your financial position.
Ways to tackle bankruptcies:
Manage your expense:
Check your spending and debt to see if you are overspending. Do you have a monthly total of what you owe? Even if your income is slightly more than your debt, you can get back on track by cutting costs and organising your finances better.
Revise your interest rates:
Pay attention to interest rates and debts first. In cases where interest payments are the main reason a person’s obligations exceed their income, a zero-interest credit card could be a good option. As a result, you may feel some relaxation and have a chance to get caught up on your payments.
Alternatively, you can consult us to get in touch with your loan servicers and explain your predicament to them. Possible assistance includes a decrease in regular payments. Some creditors may even forgive your debt, although doing so will hurt your credit.
Before going bankrupt, think clearly about the evens and odds of the process. You must try your best to avoid it; consider it when you have little to lose. Moreover, you can seek information from us according to your present situation. We would love to suggest the best options to help you out.
Frequently asked questions
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