The Disadvantages of Bankruptcy

We advise on all aspects of bankruptcy.  Some of the disadvantages of bankruptcy appear below:-

  • The Official Receiver or Trustee in Bankruptcy is required to sell assets to pay debts. This may include the sale of the family home or other properties.
  • Trustees in Bankruptcy incur significant costs which they will attempt to recover from the sale proceeds.
  • A bankrupt’s bank accounts may be frozen.
  • A bankrupt loses his assets as soon as he is made bankrupt as these pass to the Official Receiver, before a Trustee is appointed.
  • A bankrupt is unable to borrow more than £500.
  • The Official Receiver or Trustee in Bankruptcy may claim the bankrupt’s income over and above the amount he believes is required for reasonable living expenses.
  • A bankrupt cannot act as a director of a company.
  • A bankruptcy order is advertised in the London Gazette and reported to credit reference agencies.
  • Bankruptcy adversely affects a person’s credit score and the ability to obtain credit.
  • Failure to co-operate with the Official Receiver or your Trustee in Bankruptcy can result in criminal proceedings.
  • A bankrupt cannot bring most legal claims against third parties unless the Official Receiver or Trustee provide their consent, although this does not apply to personal injury claims.