Some people may be confused about claiming bankruptcy. In some areas the rules have been tightened and therefore it is important to be careful before filing a claim. It is important to explore your options before making a final decision.
Other people believe the opposite. They may think that they can accrue a lot of debt and then file for bankruptcy, believing that this will wipe out their debts without consequence. This is also not true as purchases will be reviewed in a claim and this can effectively amount to fraud. This is why it is important to get the right advice before you make the claim.
One fear people have is that if they do then it can affect their credit rating. While this is true that does not necessarily mean you will not have access to credit. However do be aware that it can remain on your credit rating record for around ten years, meaning it is less likely that the credit you can get will be higher interest.
Before filing it is important to look at all the available options. Ideally you should have talked to your creditors to see if a credit agreement can be reached before making a claim. Some may be willing to negotiate an agreement. As with any document it is important to check it to ensure that it is something that you can stick to.
One thing to be wary of is that bankruptcy can have a big effect on your credit rating. The claim will be on your records for at least ten years. During this time it is still possible to credit although it is likely you will be charged a higher rate of interest for it.
It is possible to make a claim without legal representation. However it is advised to do so in order to make sure that you make the right claim. What type you can do depends on the rules in your local area. You may be able to liquidate your assets or you may have to pay an amount to your creditors over the course of around three to five years. The kind of debt exempt from the agreement may vary according to the rules of your local area.
In short claiming bankruptcy does not have to mean losing your home, vehicle or credit rating. However it is important to be careful and to explore all your options before deciding whether this is appropriate for you. Talk to your local independent financial adviser before filing a claim so you can decide what course of action is right for your financial needs.
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