Bankruptcy is a legally binding debt solution that’s often used as a last resort if you can’t repay your debts in a reasonable amount of time.
Available to those living in England, Wales and Northern Ireland, bankruptcy is a formal insolvency process whereby your debts are written off. In Scotland, it’s known as sequestration.
You can choose to apply for bankruptcy yourself. Or, in some cases, one or more of the companies you’re in debt to can petition to make you bankrupt.
In order for this to happen, you must owe a minimum of £5,000.
Applying for bankruptcy is done through the Insolvency Service in England and Wales and the High Court in Northern Ireland. If you do apply, you’ll need to pay the fee of £680.
You can put all your unsecured debts into a bankruptcy, including mortgages. And you’ll have to surrender your home to the agreement.
Once your application has been approved, the companies you owe money to are no longer allowed to contact you or take further legal action to get the debt repaid.
Being declared bankrupt usually involves selling things you own that are of high value, such as your car or house, for money to repay your debts.
You may also have to make a monthly payment towards your debt if you earn enough.
Bankruptcies typically last for a year, and at the end, any remaining debt you have is written off.
However, it’s put on a public record and can affect your career opportunities – for example, you won’t be able to direct a company.
Bankruptcy should always be a last resort for dealing with your debt as it can have a drastic impact on your life.
If you’re thinking about applying for bankruptcy, you should consider the following:
Our online form will give our advisors an insight into your financial worries.
Our advisor will speak to you and advise on the debt solutions available.
If you are happy, our advisors will get you started with your debt solution.
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