There are many misconceptions about what happens when you become bankrupt. These misconceptions can lead to unnecessary stress and worry about what happens in a bankruptcy. If you prepare yourself with the facts about what is involved in bankruptcy then when it happens your can cope with it. Here I'll try and dispel the myths surrounding bankruptcy.

Not the case. If the debts are in your name your partner is not liable for any payments. In a reverse of what my wife says, what's yours is yours. And yes this does include all assets which belong to the bankrupt. This means that a Bailiffs or Sheriff Officer cannot take items belonging to the non-bankrupt spouse/partner.

Note
If you have joint debts and you are made bankrupt then your spouse/partner will be liable for the total debt.

Maybe not. If a house is jointly owned, ie both names are on the mortgage, then half the equity belongs to your partner and the other half is yours. This means that the creditor cannot touch their share of the equity. So this means that a third party (spouse, relative, friend) can purchase the beneficial interest in the property. Should this not happen the Official Receiver can force the sale of the property.

Well if your car is a Merc then your creditors will expect you to release the equity in it and trade down and buy a less expensive one. General speaking if your car has a value of £5,000 or above you'll be expected to trade it down.

Due to the increasing number of bankruptcies banks are now more sympathetic towards them. Many banks now have a basic account available to bankrupts. The facilities offered in these accounts are, as the name suggests, basic with no overdraft or cheque guarantee options available.

Why would you want to? It was credit which caused the bankruptcy. But, as it turns out bankrupts can apply for credit, provided that it's not for more than £250 and the lender knows that you are a bankrupt.

Seek profeesional help and advice if you think that bankruptcy is your only option, it may not be! You can also look for support from your peers in our debt forum. Face up to your debts and act now!. Act now!.