Effects of bankruptcy...,

Depends -

There are lots of negative effects of going bankrupt that you might want to consider before filing for it. I've tried to summarise some of the main ones below (for more info you might want to check out

If you have been declared bankrupt then you have to inform the lender of your status when applying for credit of £500. Failure to do so is a criminal offence.

The effect that bankruptcy can have on your credit rating can make it very difficult to conduct business as receiving credit will be virtually impossible.

The Effect of Bankruptcy on Your Assets

Once a Bankruptcy Order has been made against you, your assets are handed over to the trustee and can be sold to pay your creditors. This includes your home.

The Effect of Bankruptcy in Relation to Your Creditors

If you are declared bankrupt then you are not allowed to make any payments directly to your creditors. Instead, any creditors to whom you owe money have to make a claim to your trustee.

The Effect of Bankruptcy on Your Business or Employment Status

If you run your own business then your business is usually closed down and your employees are dismissed as soon as the Bankruptcy Order has been made. If you have any business assets, these will be taken over by the trustee along with your accounting records.

However, you can start to trade again as long as you follow certain guidelines. You may only trade under the name in which you were made bankrupt and you have to apply for a new VAT number.

Bankruptcy also affects your employment status. As a bankrupt person, there are certain positions that you cannot hold. You cannot be a Company Director, MP, Councillor, Estate Agent or Magistrate. There are also certain types of jobs that bankrupts find it difficult to get. These include security, law related and accountancy jobs.

The Effect of Bankruptcy on Your Home

Bankruptcy can have a negative affect on homeowners and tenants. For homeowners the difficulty involved in borrowing money can make moving house difficult. Whilst for tenants raising a deposit or making advance rental payments can be made awkward by the inability to borrow.

The Effect of Bankruptcy on Your Reputation

As bankruptcy is so public it can have a profound affect on your reputation. All bankruptcies are published in the bankrupt's local papers and in the London Gazette and bankruptcy proceedings are held in open court.

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