Bankruptcy – is it right for me?
We’ll help you decide if bankruptcy is your best option.
Start Again without any Debt
All included debts cleared when bankruptcy completes.
Get a no obligation assessment
Fully understand your options and any implications.
Benefit from legal protection
Collection activity and legal action stopped.
Trusted Advice – Confidential Support
Advising of the full range of debt solutions.
What is Bankruptcy
Bankruptcy is a formal insolvency procedure that while freeing you from the burden of debt, can have long-lasting affects and implications. Bankruptcy should not be entered into without serious consideration.
Bankruptcy may be suitable when existing debts far outweigh your income and assets, with little prospect of paying it back within a reasonable timescale.
After Bankruptcy your debts are written off, however being Bankrupt may negatively affect your long-term financial plans. You may lose control of valuable assets, and be required to make contributions from your income for up to three years.
How To Become Bankrupt
You can become bankrupt by 3 routes; by creditor petition should you owe that creditor £5,000 or more; by IVA supervisor should that agreement fail; and finally by applying yourself.
Applying For Your Own bankruptcy
You can petition for bankruptcy online. You will need to submit details of your current financial circumstances inclusive of income, expenditure and debts. Your application will then be reviewed by an adjudicator who decides if you should be made bankrupt or not.
If you are considering doing this yourself we strongly advise getting professional legal and financial advice beforehand.
Bankruptcy Costs
To apply for your own bankruptcy there are fees payable to the Insolvency Serivce.
These total £680 and comprise of a £130 adjudicator fee and a £550 Official Receiver’s fee.
Is Bankruptcy My Only Option?
We will assess your situation to determine if bankruptcy or another solution is your most suitable option.
But, if all other options as been explored then it’s better you take the bankruptcy option rather than continuing to struggle and getting further into debt. You would only be delaying what we hope to be the start of your financial rehabilitation.
What About My Home?
If you’re a homeowner either solely or with a partner – we will look to see how bankruptcy could impact all parties.
What About My Business?
If you’re a business owner or are self employed – it may be advantageous not to go bankrupt so avoiding restrictions that may impede your trading. We can explain how you may be better served by alternative options.
Important information
Things to consider before applying for bankruptcy, or allowing yourself to be made bankrupt.
Impact on your credit rating
The bankruptcy order stays on your credit report for six years from the date of the order. While bankrupt, you must tell any lender you’re bankrupt when applying for credit of £500 or more, including buying goods on credit.
Harder to borrow afterwards
Even after you’re discharged, some organisations may refuse you credit or other financial services because you’ve been bankrupt. Those that do lend may charge a higher interest rate. Some mortgage lenders ask if you have ever been bankrupt, so it can affect you long after it has left your credit report.
Not private
Your bankruptcy is a matter of public record. It is entered on the Individual Insolvency Register and advertised in The Gazette, the Government’s official public notices publication. A potential employer or landlord may see it when vetting you for a job or tenancy.
Payments from income
If you can afford to, you may have to make payments from your income towards the bankruptcy for 36 months.
How long bankruptcy lasts
In most cases you are released from bankruptcy (discharged) after 12 months. This can be extended, potentially for up to 15 years, if you don’t cooperate or are found to have acted dishonestly or irresponsibly.
Joint debts
If a debt is in joint names with someone who isn’t bankrupt, it won’t be written off. You won’t have to pay it, but the other person becomes responsible for paying the full remaining amount.
Loss of assets
You can lose valuable assets, including your home, or your share of it if jointly owned. Anything of value that can easily be sold to raise money for the bankruptcy could be taken.
Impact on your business
A business you solely own will very likely be closed, or assessed to see whether it could be sold to raise funds. Without the court’s permission you cannot be a company director, or be involved in forming, running or managing a limited company. If you are self-employed, you can carry on trading, subject to certain restrictions.
Impact on your employment
In some jobs, bankruptcy may lead to dismissal, demotion or other problems. Employers may be unwilling to give someone who has been bankrupt a role handling money or finance, and some professional bodies don’t allow undischarged bankrupts to remain members.
Not all debts are cleared
Bankruptcy does not clear: child maintenance arrears set by the CSA or Child Maintenance Service; criminal fines, compensation orders and victim surcharges; debts taken on after your bankruptcy order; debts obtained by fraud, such as benefit fraud; mortgages and other secured debts if you want to keep your home; Social Fund loans; student loans; TV Licence arrears; court orders to pay compensation for personal injury; and payments ordered in family proceedings, such as divorce. Apart from a few rare exceptions, all other debts are written off.