What to Do When You’re Going Bankrupt With No Assets in the UK
What happens if you're facing bankruptcy with no assets? It can be a long, hard road to go down, especially as you try to recover, but having assets to sell off can lessen the blow. Not everyone has such assets, however, so if this sounds familiar, you may be wondering what happens next.
While you could always try to figure out how to deal with it on your own by researching online, crunching numbers, and seeking out help from others, there is another way. DoNotPay can help, and here's how.
How Do You Become Bankrupt?
It's not something so simple as missing a bill. In fact, you miss a lot of bills, and these get turned over to debt collection agencies. If you fail to pay these bills, and you get taken to court, it may be time to apply for bankruptcy.
It's also possible that someone else can apply to make you bankrupt, according to the UK Government. Some of the factors that qualify someone to be bankrupt include:
- You haven't been paying your bills.
- You owe £30,000 or more.
- You broke the terms of an Individual Voluntary Arrangement (IVA).
- When you applied for the IVA, you gave misleading information.
How Long Does Bankruptcy Last?
While it may feel like forever, bankruptcy only lasts for a year, according to Real Business. This gives you some breathing room to get your life back together and take care of some debt.
This time period could be longer if you fail to uphold the terms of your agreement when you're approved for bankruptcy.
What Happens After You Legally Become Bankrupt?
You will be appointed a trustee, who will manage your assets, according to the UK Government. This person will be responsible for going through your assets and determining what you can keep and what you must give up to pay your debts.
There are very strict rules regarding this, and for the next year, at least, you are no longer in charge of your own money. You can sort of think of it as being under your parent or guardian's care again, especially if they were overly strict.
You'll have to turn over any credit cards, cheques, and bank cards to your trustee. They will then decide what you can spend when you can spend it, and if you're spending too much. It can be a very frustrating experience, especially when they begin selling some of your assets.
What Type of Assets Can You Use to Help Pay Your Debts?
Some of the items you may be forced to sell include:
- Gym equipment
- Outdoor gear
- Household furniture
In other words, anything that’s useful. With that being said, if you need it to live, then you'll be allowed to keep it.
Some items that can't be taken away when you declare bankruptcy include:
- Work tools.
- Cars for transporting you to work and back.
- Your house if you have nowhere else to go.
- Household goods that aren't worth selling or won't bring in a profit.
What Happens if You Have No Assets?
If you don't have any assets, you can't sell it. It's that simple. This doesn't mean you're off the hook and don't have to pay anything back, however.
If you're working, your trustee may garnish your wages to cover your debt. This doesn't mean you'll have to give up your whole paycheque, however. You'll still be allowed to keep enough money to pay for items such as food, rent, or your mortgage. Money for holiday or hitting up the social scene will be put towards your debt.
This arrangement is called an income payment arrangement (IPA), and even though your bankruptcy legally ends after a year, the IPA can last up to three years if your trustee pushes it.
Are There Alternatives to Going Bankrupt With No Assets?
Before you decide, you should first consider other viable alternatives to going bankrupt with no assets. For example:
|Individual Voluntary Arrangements (IVAs)||Those in debt can apply for a repayment plan with their creditors, consolidating loans and interest rates rather than declaring bankruptcy.|
|Debt Consolidation Loans||Taking out a loan with more favourable terms to pay off your other debts may help you get your finances back in shape.|
|Debt Relief Orders||A debt relief order may help you repay your debts if you owe less than £30,000.|
If your level of debt is relatively low, it would be best to attempt an alternative to bankruptcy first. If you owe more than £30,000, you can still try to arrange an individual voluntary arrangement. If this fails, then bankruptcy is the best and last option.
How to Get Debt Assistance With DoNotPay
This is what happens if you get to the point of bankruptcy. There are ways you can avoid this, however, especially your creditors are the ones pushing it. DoNotPay can help by filing a complaint on your behalf to show that the creditor is not playing fair. We can also help push the matter to court if they are harassing you. Here's how we can assist you.
- Search “debt collection” on DoNotPay.
- Answer a series of questions about the debt collectors, including when you were contacted and how you were contacted, so we can determine if they have violated any debt collection laws.
- Decide which course of action you want to take based on our guidance, such as filing a debt verification request, demanding for the collectors to stop contacting you, or reporting them to a professional trade association.
And that's it! Once you choose the course of action you want to take, DoNotPay will handle the rest. We'll deliver your request directly to the debt collectors via first-class mail, or file your complaint automatically with the relevant trade association or ombudsman.
DoNotPay Can Assist With Other Debt Collection Agencies
No matter to who you owe money, DoNotPay can help get things rolling on getting your life back. Some of the companies we can assist you with include:
- DWP Debt Management
- Amigo Loans
- Adventis Debt Collection
- Provident Loans
- Moorcroft Debt Recovery
- Lowell Financial
- Marathon Group Holdings
What Else Can DoNotPay Do?
So what can you do with DoNotPay once we help you settle your dispute with a debt collection agency or help with your bankruptcy? You use DoNotPay to handle other problems such as:
- Notarizing documents in just a few clicks
- Suing someone in small claims court
- Fighting and waiving fees
- Claim a warranty
DoNotPay is here to help, so check us out to learn more about the cool things we can do.