Bankruptcy Advice

Bankruptcy

Bankruptcy should be your last consideration, but you could get free from bankruptcy or discharged in 12 months

It's normally only in your best interests to consider bankruptcy if you are insolvent, have no assets that are likely to be sold and you have very little disposable income to repay your debts in a reasonable period of time.

Declaring yourself bankrupt is a very simple process and usually after a period of 12 months the bankruptcy is discharged. That means that the debts you owe are written off and the bankruptcy ends.

Is bankruptcy an option for you?

Bankruptcy might be the best or only way of dealing with your debts if you:

  • Have little or no disposable income
  • Have few or no assets
  • Can’t afford to pay back your creditors.

However, bankruptcy can have a number of serious implications for your personal and working life. These range from affecting your credit rating to stopping you holding certain public offices and job roles.

That’s why it’s so important to explore all your options. You may find that a different solution which puts fewer restrictions on your life and work, such as an Individual Voluntary Arrangement (IVA) or Debt Relief Order (DRO), may be a better choice.

Talk to Debts.org.uk

Our trained debt advisers will talk though your individual circumstances to find out if bankruptcy is a suitable option for you. And if you decide to proceed, you won’t be left to cope on your own. With our fully-structured bankruptcy service, we’ll support and guide you through every step of the process.

The bankruptcy process

  • The Official Receiver (OR) will take control of your estate, including any assets you own, such as property. These could be sold and the money passed to your creditors. Your case will be assessed on your individual circumstances and our experienced advisers will talk to you about which of your assets could be sold.
  • The OR will consider whether you can afford to make any extra payments to your creditors for up to three years after you’re declared bankrupt.
  • When your bankruptcy comes to an end, this is called being ‘discharged’. All your debts will be written off and your creditors can’t pursue you. This could happen after just 12 months. However, you could find it difficult and expensive to get credit in the future.

Some advantages and disadvantages of bankruptcy

Advantages

Disadvantages
  • You’ll have legal protection from your creditors.
  • You won’t need to pay your creditors directly.
  • At the end of your bankruptcy period (usually 12 months), all your debts will be discharged in full.
  • If you live at home or rent your property, your home won’t be at risk.
  • You no longer need to attend court it can be processed online.
  • You can start your application and go back to it
  • You may be able to get your bankruptcy cancelled (annulled) if you are able to pay all of your debts off.
  • If you feel that you might be at risk from your creditors by declaring yourself bankrupt you can apply to the court to have your address removed from the register
  • You may lose any valuable assets that you own, such as a house or car.
  • You can’t hold certain public offices or work in certain job roles.
  • Your bankruptcy will be published in the newspapers and in the public Insolvency Register.
  • You might have to make payments to your creditors for up to three years if the court makes an Income Payments Order, either directly or through your employers
  • In some circumstances, the court may make a Bankruptcy Restrictions Order. This will impose certain restrictions on you for to up to 15 years.
  • It costs £655 and you can pay instalments

 

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