When your finances are looking bad Bankruptcy can be the way to go. The Economist, a magazine for people involved in money called it a Personal Financial Tool. You go into it with less than nothing then emerge twelve months later with nothing but your debts are written off. If you want to borrow money banks are not going to be keen so the cash economy is the way to go. Bankruptcy is a growth industry. Why get left out?
StepChange, a charity for those in debt is knowledgeable and helpful - read their guide at How To Go Bankrupt. Or go to their Free Online Debt Advice. Losing your house if you are an owner is very possible - see https://www.stepchange.org/debt-info/debt-collection/house-repossession.aspx
Her Majesty's Government explains how to do it. They have gottten greedy. Their price is now, in this foul Year of Our Lord 2018, a grossly excessive £680. That's up from £150 some years ago. How long does it take to get under way? HMG is not saying.
What are the answers if you are involved in the Cyprus Repossessions nausea? Read on to find out. The banks are not all powerful.
HMG Explains How To Apply For Bankruptcy - https://www.gov.uk/apply-for-bankruptcy
or
Get help from a debt adviser.
or
You can also contact the Insolvency Enquiry line.
Insolvency Enquiry Line
iel.onlinedebtsolutions@insolvency.gsi.gov.uk
Telephone: 0300 678 0015
Monday to Friday, 9am to 5pm, except Wednesday, 10am to 5pm
Find out about call charges
https://www.gov.uk/bankruptcy/your-home
You lose your house, exceptions apart.
https://www.gov.uk/bankruptcy/your-assets
Will go. You get to keep the tools of your trade and your truck. Some/most/all bank cards, cheque books and credit cards will go.
https://www.gov.uk/bankruptcy/your-income
They will take your income above some minimum level based on your living expenses. This is for three years.
https://www.gov.uk/bankruptcy/when-bankruptcy-ends
Normally after a twelve month.
https://www.gov.uk/bankruptcy/restrictions
Once it starts you are not allowed to borrow more that £500 without saying you are broke. There are other things.
Strategic Bankruptcy
A strategic bankruptcy may occur when an otherwise solvent company makes use of the bankruptcy laws for some specific business purpose other than simple inability to pay debts.[1][2]Introduction
In the U.S., Chapter 11 bankruptcy made it possible for a business to declare bankruptcy without actually being insolvent. It is also strongly weighted toward retaining the existing management through the process of restructuring, on the basis that the existing management would be most familiar with the business and thus best equipped to preserve as much of its value as possible. These two conditions laid the foundations for modern strategic bankruptcy.[3]Strategic bankruptcy occurs where bankruptcy is a strategic choice rather than an unavoidable condition. Such a choice might be made to avoid or reduce heavy legal judgements, to sidestep existing contracts, or even as a tool for manipulative debt reduction. Under bankruptcy law, debts are not avoided entirely, but may be significantly reduced to the point where a business owner may consider this option profitable or at least less unprofitable. Existing contracts, collective bargaining agreements, and legal judgements are more likely to be set aside entirely as a result of bankruptcy. These must always be reargued under the different rules applying to bankruptcy proceedings.[4]
Strategic debt cutting
The debt forgiveness inherent in declaring bankruptcy can be used to manipulate debt management. In 2011, Donald Trump told Newsweek that "I do play with the bankruptcy laws – they're very good for me" as a tool for trimming debt."[5] To Forbes, Trump said that "I’ve cut debt -- by the way, this isn’t me personally, it’s a company. ... Basically I’ve used the laws of the country to my advantage and to other people’s advantage just as Leon Black has, Carl Icahn, Henry Kravis has, just as many, many others on top of the business world have."[6] Altogether, Trump has filed six times for Chapter 11 bankruptcies for his businesses, some of them three times under different corporate structuring and names.[7]
Breaking contracts
A strategic bankruptcy can be used to get away from expensive contracts which would otherwise be unbreakable. The contracts might be with employees or with business partners.
When the airlines Sabena and Swissair went bankrupt and were restructured, they also were able to break high salary and expensive pension contracts with pilots and other staff.
In 2002 Kmart filed Chapter 11 for protection from creditors. One of the main problems affecting Kmart's cash flow and therefore its liquidity was that Kmart was locked into long-term leases at premium rates with respect to various unprofitable stores. While in chapter 11 reorganization, Kmart was able to renegotiate or rescind those particular leases.
Strategic bankruptcy has been used by Donald Trump to attempt to escape lawsuits over never-built condo projects by placing all responsibility onto his business partners.[8] The claim is that he was not involved in the actual building of the property.
Same name, different company
Owners of companies with deep debts will sometimes open a new company before declaring bankruptcy on the previous company. The phoenix company usually buys all the important assets, including the old name, and continues with much smaller debts. This purchase can be financed by e.g. further investors or bank loans. Since banks are usually prioritized in debt collection, they can get money back from the old company.
The General Motors Chapter 11 reorganization of 2009 resulted in a brand new company, which owned almost all the assets of the old company. Although technically it operates under the new name of NGMCO Inc, which stands for New GM Company, it is still most commonly known as GM, and none of its core branding has changed. However, the old GM stock was removed from the New York Stock exchange in 2009, to be replaced by a new IPO in 2010. This resulted in some initial confusion among investors, some of whom continued to trade in the old shares, which still circulate as Pink Sheets under the symbol MTLQQ.[citation needed]