(PRWEB) August 11, 2010
Bankruptcy is one way for you to deal with unsecured debts that you cannot pay. The idea is that it will allow you to make a fresh start and any assets you do have will be shared out among your creditors fairly. Upon being made bankrupt there are a number of restrictions placed on you for the period you are bankrupt. In this article, Gordon Goldie of http://insolvency.taitwalker.co.uk/ sets out some basic information on bankruptcy.
How do you become bankrupt?
There are two ways to be made bankrupt
1. A creditor (someone you owe money to) can apply to Court to make you bankrupt http://insolvency.taitwalker.co.uk/bankruptcy-creditors-petition/index.html
2. You apply to Court to http://insolvency.taitwalker.co.uk/how-to-declare-yourself-bankrupt/
The main advantages/disadvantages of being bankrupt are losing control of your assets with bankruptcy lasts for a maximum period of 12 months. It is not possible to get credit over £500 without informing the person you are obtaining credit from that you have been made bankrupt. In addition those who are bankrupt cannot be be a company director whilst bankrupt. You can still hold public office, but there are less job/career restrictions - but always check as certain careers are prohibited.
However, once the debt situation is solved, you are given a fresh start and you will be free from the bankruptcy debts and you will have more control over how your assets will be dealt with. You are able to trade as a sole trader, but you must trade under the name in which you were made bankrupt.
Other important business and trading points to be aware of:
- You cannot be concerned with the management, promotion or formation of a limited company while bankrupt
- You cannot trade under any other name other than that under which you were made bankrupt
- Credit rating may be affected even after the bankruptcy has ended. It will be registered with credit reference agencies and will usually stay on file for a period of 6 years
- If you own your own business this will usually be closed down and your employees contracts terminated
Gordon Goldie, heads Tait Walker’s Corporate Recovery team and provides advice to advisers, directors, individuals, creditors and financial stakeholders (including banks, asset based lenders and venture capitalists) on formal and informal related matters. http://insolvency.taitwalker.co.uk/staff-profiles/