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, so you can write off your outstanding debt and make a fresh start.
What are the benefits of bankruptcy?
- A 'light at the end of the tunnel' – a date when you know you'll be debt free
- Debts written off when discharged from bankruptcy – normally after 12 months
- Peace of mind
- Protection from creditors
- A chance to make a fresh 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 freephone 0800 074 4222 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 £485 (£335 Official Receiver's deposit + £150 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:
- IVA (Individual Voluntary Arrangement)
- Debt management plan
- Debt consolidation loan
- Debt consolidation remortgage