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Disadvantages of bankruptcy
You will remain liable for certain debts – in particular student loans, fines and some debts arising from family proceedings.
Your employment may be affected.
You may have to close down your business.
Whilst an undischarged bankrupt you cannot:
• be employed as a Company Director or be involved in its management unless the court agrees
• obtain credit over £500 without telling the creditor of your status.
If you have acted irresponsibly, recklessly or dishonestly an order may be made for the restrictions to be extended beyond discharge for 2 to 15 years.
Ownership of all your assets will pass to your Trustee in Bankruptcy, whose main job will be to realise them for the benefit of your creditors. This will include your share of any equity in your home. Whilst your spouse is likely to have rights of occupation which are good against the Trustee, this protection will tend to last for only 1 year.
Notice of the Bankruptcy will appear in the local paper and entered on a public register. It may stay on your credit reference file for 6 years (source: Information Commissioners Office Leaflet “Credit Explained”)