1) Many myths exist around bankruptcy, such as being blacklisted, losing one's job, or neighbors finding out. However, bankruptcy does not necessarily mean these outcomes. 2) While creditors stop chasing debts once bankruptcy is declared, discharge usually occurs within 6-12 months. If disposable income exists, some may be paid over 3 years. 3) Bankruptcy completely eliminates unsecured debts, and with advice, common possessions and cars can often be retained.

1. BANKRUPTCY MYTHS Darren Brown t: 07934 461863 e: darren.brown@debtdr.co.uk w: www.debtdr.co.uk

2. Myth - If I go bankrupt I’ll be “blacklisted” for credit. You can have a VISA debit card even whilst you are in bankruptcy, so you can buy things on-line, in shops, pay bills etc, providing of course you have a positive balance on your account. Once discharged it is frightening how quickly some can get credit again (if they want to) or get a mortgage, because by definition they have no debts.

3. Myth - My employer will sack me There are very few professions where going through bankruptcy will effect your employment (possibly accountants, bank staff etc.) It is your right to protect yourself from your creditors and is not generally relevant to you employer. By contrast, being heavily in debt can have an impact on employment as you may be considered a security risk.

4. Myth – My neighbours will know Your name and address will be published on the national government insolvency website. If someone is minded to enter your name they will find you. Bankruptcies are published in the local paper, but you have to work hard to find whereabouts in the paper it is recorded. There is no reason why your neighbours will be any the wiser, unless they have nothing better to do than search the internet and local papers for your name.

5. Myth – But it last for three years Your creditors have to stop chasing you as soon as you are declared bankrupt. You are usually discharged between 6 and 12 months from the date of your bankruptcy. If you have disposable income however, you will have to pay some of that to the Official Receiver for a three year period.

6. Myth – I will have to pay it all back If you have no disposable (i.e. spare) income and no assets, then you pay nothing at all. Your unsecured debts (i.e. not the mortgage) are completely written off.

7. Myth – I run my own business, I won’t be able to continue working Whilst it is true that you cannot be a company director whilst bankrupt (6-12 months) As soon as you are discharged you should be free to become a director again. If you are a sole trader you will likely be able to continue trading as long as you trade under the same name.

8. Myth – I will lose my car So long as you can demonstrate that you NEED your car for work, for visiting sick relatives etc. you will likely be able to keep your car. (as long as it is not too valuable…take advice before entering bankruptcy on what is deemed too valuable)

9. Myth – I will lose my house Not necessarily, it will depend on many factors. Do you own your home by yourself or is it jointly owned, how large is your mortgage, what is it’s value, do some of your creditors have security? You need to take expert advice when assets are involved. You may be able to buy back the beneficial interest in your home for just £1. (take advice before bankruptcy)

10. Myth – They will come into my house and take away my things. Nobody will enter your house, and your normal household possessions are not effected. Large assets will need to be declared and arrangement made with the Official Receiver/Trustee as to how these will be dealt with. (take advice if you feel you have something that would not fall under the heading of ‘normal household possessions’)

11. Myth – Taking yourself through bankruptcy is illegal and should be made an offence Going through bankruptcy, even for many thousands of pounds is not an offence, and the Insolvency Service will treat you with courtesy as long as you do the same to them. If you are insolvent, bankruptcy is not only not illegal, but may even be a legal requirement. It is illegal to continue taking out credit whilst insolvent with no realistic means of paying it back.

12. Bankruptcy – Just one of the many solutions that debtDr will recommend and then assist clients with. We will always recommend the right solution for YOU the client, and are happy to give advice if through no fault of your own you find yourself in debt looking for the right way out. DARREN BROWN (debt advisor) call: 07934 461863