Bankruptcy Advantages and Disadvantages

What are the advantages of bankruptcy?

For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year.

For creditors a bankruptcy allows a full investigation of the debtor's financial affairs to be carried out.

What are the disadvantages of bankruptcy?

You will lose all of your major assets including your family home and motor vehicle.
You will not be able to obtain finance for the term of your bankruptcy and for many years afterwards you will find it very difficult to obtain finance from recognised lenders at market rates.
Certain occupations and professions will not allow you to go bankrupt.
You cannot act as a company director.
You will be restricted from the promotion, formation and management of a company.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
You may not act as a Justice of the Peace (JP).
You may not become a Member of Parliament.
Your credit is affected for many years after the annulment.

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Important note: The information on this and all pages on this website contains a summary of basic information on debt and debt consolidation issues. It is not a substitute for legal advice. Some provisions of the law referred to may have important exceptions or qualifications. This document may not contain all of the information about the law or the exceptions and qualifications that are relevant to your circumstances. You will need a qualified professional advisor to take into account your particular circumstances and to tell you how the law applies to you.

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