Bankruptcy facts must not be taken lightly — It should not be considered if you have assets of any reasonable value and own your own home, even if there is little or no equity. Contrary to what might be said about the new Enterprise Act, which states that certain classifications of bankrupts could be discharged in twelve months, this will happen in relatively few cases, and it should be remembered that the stigma of bankruptcy will probably NEVER go away.
Even after being discharged, it can affect the ability to obtain a mortgage or get credit for many years to come. Being declared bankrupt is a very public matter, some of the effects are;
Bankruptcy is always advertised: The bankruptcy application will be advertised in the London Gazette and the local press where you live.
Notification is made to everyone financially connected: Your bank, building society, creditors, landlord, etc. will be informed immediately.
Bankrupts cannot run a business: Any business you own will be closed immediately.
Future assets will be lost: Any asset that might have been acquired during the term of the bankruptcy, such as inheritances, insurance pay-outs/maturities, equity in property, windfalls, etc.., and possibly pension income.
All accounts closed: Bank accounts, credit cards will be closed. Anything that is being purchased by lease or HP, such as your car, will be immediately returned to its owner.
Previous Bankrupts: People that have been bankrupt before should be very careful about being made bankrupt again, as the minimum period of bankruptcy is 5 years, and could continue for up to 15 years before being discharged.
Professional & Business Status: Certain employment situations will be prejudiced by being declared bankrupt, and professional and business status will be lost. Membership of many associations and societies will also be lost.