Which is better? To go Bankrupt voluntarily or a creditor making you bankrupt?

Question

Also, one creditor is saying that, but would it include my others if they made me?

Please no stupid answers like pay your bills or i'll have answers withdrawn.

Answer 1

There is no difference in the way the bankruptcy is conducted.

In the UK, a creditor can make you bankrupt if you owe more than £750 (either to that one creditor or to more than one acting together). In practice, very few will do this.

The reason they are reluctant is that it costs them money which they will not recover. To make you bankrupt they have to provide prima facie proof that you are unable to pay your debts. The only safe way for them to do this is to get a court judgement on which you then default. They therefore prefer to keep threatening you to get you to pay them the money. They will often tell you lies about the effects of bankruptcy (and I'm talking about the big lenders here, not just someone who is ignorant of the facts).

The advantage of applying yourself is that you have some control over the timescale. Once you are made bankrupt you can tell your creditors not to bother you and the phone calls will eventually stop. (Some seem to take quite a time for it to sink in. They hope to browbeat you into paying a little bit but this is not allowed)

The downside is that you will have to pay the fees. There are reduced fees if you are on benefits but it will still cost something. Once the decision is made just draw cash if you have any credit remaining or else just stop paying any creditor (except those related to housing) and save up that way.

Are you sure bankruptcy is the right course of action? Take advice from either CAB or CCCS or post for help on the forum in the link. This is done anonymously and the advice will definitely be impartial.

Answer 2

I don't know which is better, but your local Citizens Advice Bureau may be able to tell you, or the Insolvency Service, London W1 may be able to help. I was made bankrupt when my partner embezzled my business. I was discharged after three years, that was nearly five years ago, since then I have had A1 credit rating, it wasn't so bad. I also lost my home and everything at the time, so they couldn't touch that anyway, but your home, car and everything may be at risk if you are declared bankrupt, I don't know if this is the same for voluntary declaration, the Insolvency Service or CAB can tell you. Once you are bankrupt, I believe it includes all your creditors. I don't even know which creditor made me bankrupt, or if several of them did, my partner got away with it though, somehow. For those three years, you cannot apply for credit over the amount of £250 without the Insolvency Practice's prior permission, to be honest, it gave me the chance to get my life back together again. I was unable to work through illness, so they couldn't take any wages, but I don't know what the proceedure is if you do work. It feels like the end of the world at the time, but it really isn't that bad, and its a weight off your mind, no more phone calls and bailiff visits or threatening letters. Once you are bankrupt, no existing creditor can chase you for money, as far as I know. And as you technically cannot run up any more debt, no new ones can either. Get some professional advice tomorrow before you make that decision, but do do it tomorrow, before a creditor takes that decision away from you. I don't know if its less than three years or more if you go voluntarily bankrupt, but again, the CAB or Insolvency Service can tell you. You will get through it, it really isn't that bad, and really is so much better than owing money all over the place. Its okay people saying pay your bills, but when you get to a certain point, there just isn't the income to cover it, and you still have to eat, sleep somewhere, have heating, lighting, get around, wear clothes. Good luck, whichever way, it will be a release. God bless.

Answer 3

A creditor cannot force you into bankruptcy, that is a legal manuever that you must chose for yourself. In fact, most creditors want to avoid you going into bankruptcy, because if you go into bankruptcy they have little chance to get any money.

Now many collection agencies will make wild comments like "you'll be thrown in jail" or "we'll force you into bankruptcy!" in a strong-arm attempt to get you to pay them off. These types of comments skate very close (and often break) federal laws and regulations concerning collection actions.

And a bankruptcy includes all of your debts and all of your assets, although several forms allow you to retain some property, like your home, one car, etc.

Good luck

Answer 4

It can be done but it's not that easy....takes at least 3 creditors to file petitions against you in a "class action" type of suit.

So it would be unlikely that your creditor would be able to force you into bankruptcy (ask them who would be joining their suit...and tel them you know it needs to be 3 to do it).

But lets talk about the bigger issure...are you so far in debt that you are having problems maintaining all of your debts, or is it just this one. If you are in so deep that you are borrowing and begging for money just to pay your creditors, it really might be time to consider filing bankruptcy.

http://www.lawdog.com/bkrcy/lib2a1.htm#Involuntary

Answer 5

You cannot be forced by anyone to file bankruptcy. I included a couple of websites below that cover the basics of bankruptcy and has all the forms to get you started. But do find an attorney and make sure you all your debts ready.
Hope everything works out for you. Remember your not alone.

Answer 6

no one else can make you bankrupt. If you just let it go, it will affect your credit rating longer than declaring bankruptcy. If you're talking credit cards, you might still have to repay the creditors on a payment plan - the laws have changed

Answer 7

A creditor cannot force you into bankruptcy. You have to make that decision. You should look at your financial position and maybe talk to a bankruptcy attorney to find out all of your options and which one would be best for you.

Answer 8

depends if you are UK or not. but if you are then they can file againgst you, despite what other people have put here. however why would they want to force you into a position where they are going to get nothing back and the debt written off - unless they know you have got assetts, like a house, that can be sold to pay them

and it would include all your debts.

they would rather get you into an IVA, at least that way they get something back.