Bankruptcy is a form of insolvency which is normally suitable if you can’t pay back your debts in a reasonable period of time. Assets you own such as house or car could be sold first to pay off your debts. After you have been declared bankrupt your creditors will write off your unsecured debts, this will allow you to make a fresh start, however, there are restrictions for the 12 month period of Bankruptcy whereby you will have to declare any changes to your personal circumstances to the official receiver. You will have to pay £680 to declare yourself bankrupt (£130 adjudicator fee and £550 bankruptcy deposit) this can be paid in instalments as low as £5. If you are living in Northern Ireland you will have to pay £647 to declare yourself bankrupt (£115 court fee, £525 bankruptcy deposit and £7 solicitor’s fee).
- Once granted you will be protected from creditor action.
- You could be discharged after 12 months.
- Debts written off at the end of the agreement and you will be granted “debt forgiveness”.
- You don’t have to deal with your creditors.
- You may be required to sell your assets, including your property.
- If your situation improves and you have a disposable income you may be required to make a monthly contribution for up to 3 years.
- The bankruptcy will adversely affect your credit rating for 6 years.
- Depending on your job role/title there may be restrictions from your employer that will not allow you to go bankrupt.
- Cannot take out any credit until you are discharged from the bankruptcy.
- Your bank account is very likely to be frozen.
- Name will be published on an Insolvency register.
- Bankruptcy cannot be joint.
- You could possibly have a bankruptcy restriction made against you which can last up to 15 years and affect your financial affairs.
Please note: Debt Support Service does not administer Bankruptcy.