As You Won T Have Access To New Credit Cards, This Can Actually Be A Blessing

Category: Finance, Credit.

Many individuals consider bankruptcy as a simple way to remove a massive debt burden, and it s often the first thing people consider when struggling financially. While legally it is relatively straightforward in the UK to actually file for bankruptcy, as with any, the steps legal case, can be far from painless.

Whilst it could well help with a bad financial situation, it s not always straightforward and should be seen as final option. You ll have to justify your application, showing all your credit history to a judge and exposing it to objections by creditors. Even if you re successful, there are various impacts that you ll need to review before taking such drastic action. If you owe them a lot of money, they are not likely to settle easily with minimal repayment offers. You will surrender any credit cards that have money owing and others will more than likely close your account. Depending on your family situation, it is possible that you may even lose your home. You ll additionally find it near impossible to acquire a mortgage or other large secured loans.

Not every debt is covered by a bankruptcy filing. Even after you fulfilled the official time period for bankruptcy, you could still find that your financial record is poor and obtaining any credit in the future may be almost impossible. You need to check details thoroughly as many loans, taxes and some other debts can be exempt from bankruptcy protection. Of course, this may well be a positive thing in the long run! Unfortunately, there are some people who simply should not be able to obtain easy credit, until they can improve their personal financial management. As you won t have access to new credit cards, this can actually be a blessing.

Beyond the credit impact, you may actually be required to relinquish assets, valuable furniture or, for example jewellery even your car. Courts incur costs and, if you use a legal professional, that will also add additional charges. Lastly, the bankruptcy procedure itself is not free. On the upside, you will get relief from debt collectors( assuming they receive notification) and any foreclosure action will be stopped. It can serve as a huge wakeup call to improve any bad money management habits. By taking action sooner rather than later, you will start to rebuild your credit history that can be advantageous in the long run.

For some, it is necessary to hit rock bottom before finding the required discipline to make long term plans however, as this can be hard, think cautiously and, you should obtain expert advice prior to committing to action.

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