Effects of Bankruptcy
I can honestly say that the effects of bankruptcy can sometimes be surprising.
Some are expected and originate directly from the bankruptcy process through the sale of personal assets, bankruptcy restrictions and financial consequence for instance.
Others are not so expected and are generally not thought about when considering bankruptcy. Examples include relationship problems, job loss, stress and other people’s attitudes.
The Expected
Looking after your finances during bankruptcy does become slightly easier as there are no creditors chasing you. However, contrary to the famous myth “once your debts are wiped you can start spending again” financial hardship continues throughout bankruptcy and for a short period thereafter.
If the Official Receiver determines you have a surplus income beyond the domestic living needs of you and your family you will be expected to contribute to your creditors for up to three years. Facing the prospect of bankruptcy this was somewhat bewildering as I was choosing bankruptcy to wipe the slate clean and start again. I guess the quick form of relief some people associate with bankruptcy isn’t always there.
On an average salary I knew I wouldn’t have much of a disposable income. This did limit my social opportunities but better that for a short period than owing creditors money that I cannot afford to repay for years to come and then having to experience bankruptcy anyway!
At the time of declaring my bankruptcy I had very few assets. There was a car worth less than £1000 pounds, an old PC and some old DJ equipment. Upon seeking advice I was informed that the trustee in bankruptcy might take these assets, however, it was unlikely due to their low value. I was told that if I owned an expensive car I would probably be expected to replace it with a cheaper car - the remainder of the sale proceeds then given over to the creditors. I’m just glad I didn’t have a house or any other valuable asset that I would be forced to sell.
Whether or not I will have a bankruptcy restrictions undertaking (BRU) put forward to me is something I will simply have to wait for. Generally speaking a BRU is intended to prolong the restrictions of bankruptcy for those who have been dishonest or blameworthy in some way. Considering that I have not behaved recklessly before the bankruptcy a solicitor advised me that it is unlikely.
Having poor creditworthiness goes hand in hand with bankruptcy. Shortly after the bankruptcy order had been made I checked the London Gazette and as expected my bankruptcy had been advertised. It was sure to appear on my credit file now as the credit referencing agencies use the gazette as one way for gathering information. I haven’t yet checked my credit file but as soon as I am discharged I fully intend to order it and begin repairing my credit. After all, I will want a mortgage at some point even if it is a bankruptcy mortgage where I will be required to pay a deposit, higher interest and high broker fees. It will sure help having worked in financial services before.
The Unexpected
At the time of my bankruptcy I had to deal with life events that were unexpected and extremely unpleasant for me. The emotions experienced were simply magnified under the duress of bankruptcy.
In June of 2006, about five months after the day I was made bankrupt, Miss Piggy and I parted ways. I knew things were difficult - they were bound to be - yet I never thought in a million years it would end.
Subsequently, my Gran passed away at the age of 79. Then it all started hitting home.
Right now I find it difficult to reflect on what has happened over the last nine months yet I am able to accept these happenings. Whilst they have not all been caused by the bankruptcy it would have certainly been easier without the experience.
The truth is that whilst trying to come to terms with these events it all seems somewhat surreal. I am usually the type of person to absorb what comes my way, accept something has happened and get on with it. This time it is very different. I am no longer able to numb myself to these obstacles that are being thrown my way and I am feeling very different emotions. I am not the type of person who deals with life by crying which I think makes it more difficult. One thing is for sure though, as of late not a day goes by where I don’t feel the emotions of what has happened.
I know that at this point in time I am experiencing some of the bad cards life has to throw at you. Everyone experiences difficulties throughout their life and I’m sure each individual feels different emotions - consequently reacting differently. I am not able to understand why some people go to the lengths they do to deal with this darker side but I do have an appreciation of how your emotions can overtake your ethos and demand you fight harder. For some it can be too much and I think it is important to remember that.
I certainly see people with problems under a different light now and I am a much more empathetic person because of my recent experiences. If there is just one wise thing I could say to people in debt it is take advice and get it sorted. Life can be hard enough without the hardship of being in debt. The last thing you want to do is let it spiral out of control and head towards bankruptcy. Trust me!
When I recognised my debt problem as serious I took advice immediately, which definitely helped quash the anxiety of what laid ahead. Without taking advice I may have ended up making the wrong decision and worsening my situation. I dread to think! The advice I received not only helped me make the correct decision but also helped prepare me for what it would be like in the future.
I keep telling myself that whilst bankruptcy may have put my life back a step or two for me it was the only way forward. Better to take two steps back and three steps forward as opposed to burying my head in the sand and taking five steps back.
Relationship Breakdown
Some are expected and originate directly from the bankruptcy process through the sale of personal assets, bankruptcy restrictions and financial consequence for instance.
Others are not so expected and are generally not thought about when considering bankruptcy. Examples include relationship problems, job loss, stress and other people’s attitudes.
The Expected
Looking after your finances during bankruptcy does become slightly easier as there are no creditors chasing you. However, contrary to the famous myth “once your debts are wiped you can start spending again” financial hardship continues throughout bankruptcy and for a short period thereafter.
If the Official Receiver determines you have a surplus income beyond the domestic living needs of you and your family you will be expected to contribute to your creditors for up to three years. Facing the prospect of bankruptcy this was somewhat bewildering as I was choosing bankruptcy to wipe the slate clean and start again. I guess the quick form of relief some people associate with bankruptcy isn’t always there.
On an average salary I knew I wouldn’t have much of a disposable income. This did limit my social opportunities but better that for a short period than owing creditors money that I cannot afford to repay for years to come and then having to experience bankruptcy anyway!
At the time of declaring my bankruptcy I had very few assets. There was a car worth less than £1000 pounds, an old PC and some old DJ equipment. Upon seeking advice I was informed that the trustee in bankruptcy might take these assets, however, it was unlikely due to their low value. I was told that if I owned an expensive car I would probably be expected to replace it with a cheaper car - the remainder of the sale proceeds then given over to the creditors. I’m just glad I didn’t have a house or any other valuable asset that I would be forced to sell.
Whether or not I will have a bankruptcy restrictions undertaking (BRU) put forward to me is something I will simply have to wait for. Generally speaking a BRU is intended to prolong the restrictions of bankruptcy for those who have been dishonest or blameworthy in some way. Considering that I have not behaved recklessly before the bankruptcy a solicitor advised me that it is unlikely.
Having poor creditworthiness goes hand in hand with bankruptcy. Shortly after the bankruptcy order had been made I checked the London Gazette and as expected my bankruptcy had been advertised. It was sure to appear on my credit file now as the credit referencing agencies use the gazette as one way for gathering information. I haven’t yet checked my credit file but as soon as I am discharged I fully intend to order it and begin repairing my credit. After all, I will want a mortgage at some point even if it is a bankruptcy mortgage where I will be required to pay a deposit, higher interest and high broker fees. It will sure help having worked in financial services before.
The Unexpected
At the time of my bankruptcy I had to deal with life events that were unexpected and extremely unpleasant for me. The emotions experienced were simply magnified under the duress of bankruptcy.
In June of 2006, about five months after the day I was made bankrupt, Miss Piggy and I parted ways. I knew things were difficult - they were bound to be - yet I never thought in a million years it would end.
Subsequently, my Gran passed away at the age of 79. Then it all started hitting home.
Right now I find it difficult to reflect on what has happened over the last nine months yet I am able to accept these happenings. Whilst they have not all been caused by the bankruptcy it would have certainly been easier without the experience.
The truth is that whilst trying to come to terms with these events it all seems somewhat surreal. I am usually the type of person to absorb what comes my way, accept something has happened and get on with it. This time it is very different. I am no longer able to numb myself to these obstacles that are being thrown my way and I am feeling very different emotions. I am not the type of person who deals with life by crying which I think makes it more difficult. One thing is for sure though, as of late not a day goes by where I don’t feel the emotions of what has happened.
I know that at this point in time I am experiencing some of the bad cards life has to throw at you. Everyone experiences difficulties throughout their life and I’m sure each individual feels different emotions - consequently reacting differently. I am not able to understand why some people go to the lengths they do to deal with this darker side but I do have an appreciation of how your emotions can overtake your ethos and demand you fight harder. For some it can be too much and I think it is important to remember that.
I certainly see people with problems under a different light now and I am a much more empathetic person because of my recent experiences. If there is just one wise thing I could say to people in debt it is take advice and get it sorted. Life can be hard enough without the hardship of being in debt. The last thing you want to do is let it spiral out of control and head towards bankruptcy. Trust me!
When I recognised my debt problem as serious I took advice immediately, which definitely helped quash the anxiety of what laid ahead. Without taking advice I may have ended up making the wrong decision and worsening my situation. I dread to think! The advice I received not only helped me make the correct decision but also helped prepare me for what it would be like in the future.
I keep telling myself that whilst bankruptcy may have put my life back a step or two for me it was the only way forward. Better to take two steps back and three steps forward as opposed to burying my head in the sand and taking five steps back.
Relationship Breakdown
You may also like to view my bankruptcy website.
If you have any questions regarding my experience then please feel free to E-Mail me.
posted by Piggy Bankrupt at
9:38 PM
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