E-insolvency can help you and advise you on the the effects of Bankruptcy. For further help please call 0800 074 6918 or complete the form on the left of the site.

The effects of bankruptcy on the individual include:

1. The effects of losing your home and high value items such as car.
2. The effects of losing inheritance or pension windfalls.
3. The effects of not being able to qualify for credit.
4. The effects of not being able to be a limited company director.
5. The effects of not being able to act as a solicitor, barrister or accountant.
6. The social stigma effects of bankruptcy.
7. The emotional effects of bankruptcy.

What are the effects of Bankruptcy?

Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home.

Where the home is co-owned, the debtor’s interest can still be realised, but a right of occupation period of twelve months is allowed for the disposal of the property if a co-owner, family or dependents of the debtor occupy it. At the end of the twelve-month period, the property will almost certainly have to be put up for sale, enforced by a Court order if necessary.

The other main disadvantages of bankruptcy are the constraints forced upon the bankrupt and the stigma of having to declare oneself as a bankrupt for certain transactions.

A bankrupt may not:

• Obtain credit of £250 or more alone or jointly with another person without disclosing his or her bankruptcy
• Conduct business directly or indirectly in any name other than that in which he or she was made bankrupt
• Be involved directly or indirectly in promoting, forming or managing a company without the Court’s permission
• Hold certain public offices

When a bankrupt is discharged these constraints are ended.

A bankrupt may open a new bank or building society account but should disclose the fact that they are bankrupt. The bank or building society may then impose conditions and limitations. Overdraft facilities or chequebooks must not be obtained, as they are likely to be dishonoured. The bankrupt must inform the Trustee of any funds available in the account, which exceed the normal living expenses, in order for the Trustee to distribute among the creditors.