Advice with bankruptcy

Sometimes, there's simply no way to repay what you owe in a reasonable time. If your debts are particularly high and / or your income is low, you may need to think about declaring yourself bankrupt.

Like an IVA (Individual Voluntary Arrangement), bankruptcy is a form of insolvency: it's a legal process that will share out your assets fairly among your creditors, protect you from further legal action and upon successful completion (normally after 1 year), write off your outstanding debt allowing you to make a new start.

What are the benefits of bankruptcy?

  • A 'light at the end of the tunnel' - a date when you know you'll have repaid your debts
  • Upon successful completion you'll have no further liability to your creditors - normally after 12 months
  • Peace of mind
  • Protection from creditors
  • A chance to make a new start when your bankruptcy is over

What are the drawbacks of bankruptcy?

  • Any valuable assets, including your home, may be sold so the funds can go towards repaying your creditors
  • You will not be able to work in some professions - as a company director or local government councillor, for example
  • Your bankruptcy will be advertised in newspapers
  • Bankruptcy is a formal, court-driven process
  • Bankruptcy will affect your credit rating for 6 years

Is bankruptcy right for me?

While it should be considered very carefully and as a last resort, bankruptcy is the best way out of debt for some people.

It all depends on your situation - bankruptcy might be right for you if you:

  • have a limited disposable income,
  • don't think your financial situation will improve in the short to medium term,
  • can't repay your debt within a realistic timeframe,
  • own few assets, and
  • have already considered other debt solutions.

It's a serious decision that shouldn't be made before you've spoken to a specialist about bankruptcy. It's essential to understand the consequences of bankruptcy - and how they compare with the consequences of alternative debt solutions

Call us on 0800 195 2911 or fill in the call-back form on this page and one of our expert bankruptcy advisers will phone at a time that's convenient for you.

How do I apply for bankruptcy?

You can apply for bankruptcy by filing a petition at the County Court - the district judge will decide whether or not to grant the bankruptcy. You'll have to pay 700 (525 Official Receiver's deposit + 175 court administration fee). If you're unemployed or on a low income, you may not have to pay the court fee when you apply for bankruptcy.

This is called Voluntary bankruptcy.

There's also Involuntary bankruptcy: any of your creditors can petition for your bankruptcy if you owe them 750 or more.

Possible alternatives to bankruptcy:

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