From issue 17, Spring 2013
Bust Actually: What exactly does bankruptcy mean?
In 1994 wannabe actress Martine McCutcheon was working in Knickerbox for £1.50 per hour.
That’s when the phone call from Eastenders came and the girl from a broken home, whose mother had worked three jobs at a time to make ends meet, became Tiffany Raymond, star of Albert Square.
Four years later, when her character was killed in a hit-and-run accident, 22 million people tuned in to watch her. Hers was a classic rags to riches story.
More success followed; her single Perfect Moment reached No 1 in five countries, she made a big screen debut in Love Actually with Hugh Grant, and in 2009 her debut novel The Mistress, was released. She was the star of stage and screen and the face of advertising campaigns.
Yet despite reportedly earning more than £250,000 a year, in February 2013 Martine McCutcheon was declared bankrupt in a Hugh Court in London. She could no longer keep up with her debts.
Bankruptcy can be a useful measure to protect yourself from debt collectors when all else fails. If you declare yourself bankrupt all of your assets (house, car and anything else of value) will be sold off and the proceeds used to pay your debts. If you earn any money while bankrupt you will be allowed to keep enough to feed yourself and any family you may have. The rest pays off your debts.
After a period of time has passed (usually a year) you will be ‘discharged’. This means that all your debts are cleared, and that any money you earn from that point on is yours to keep again. You will not however get back any of your assets.
- Use a bank/building society account or credit card (You get a basic bank account)
- Obtain credit for over £500
- Trade in any business under any other name
- Promote, form or manage a limited company
- Be the trustee of a charity or pension fundIf things get too much, take a look at our Debt advice page here.