What effect does bankruptcy have on your credit rating?

What is bankruptcy?

Bankruptcy is obtained through a court order. It allows you to discharge all your debts and start again. It is a last resort for those who are insolvent and cannot pay their creditors. Bankruptcy has several consequences which people should be aware of before they petition the court for a bankruptcy order. These consequences include losing control over their assets, including their home; having their assets sold and the proceeds distributed to their creditors; an investigation into their financial affairs; restrictions placed on their activities; and a negative effect on their credit rating. Therefore people are highly advised to obtain legal advice from a solicitor who specialises in bankruptcy before filing their bankruptcy petition.

How does it affect your credit rating?

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