Learn more about Bankruptcy
What is a Bankruptcy?
If you are unable to pay your debts you can apply to make yourself bankrupt. Bankruptcy is a formal insolvency route and can have serious financial implications.
Bankruptcy is often seen as a last resort and, if appropriate to your circumstances, can be applied for when no alternative solution can be found – such as an Individual Voluntary Arrangement.
Hows does Bankruptcy work?
Other people can put you into bankruptcy or you can make this choice yourself. It’s something to be carefully considered.
The three ways you can go bankrupt are:
- You apply for bankruptcy yourself
- An application for bankruptcy from a creditor
- By the IVA Supervisor if you fail to meet the terms of your IVA
Bankruptcy is a debt solution available to residents of England, Wales and Northern Ireland.
Benefits and Considerations of Bankruptcy
Benefits of Bankruptcy
- Your Bankruptcy could be discharged within 12 months
- It can free you from the pressure from creditors
- All debts that qualify for bankruptcy are written off
- The stigma of bankruptcy is not what it once was
- The process to make yourself bankrupt is now completed online
Considerations of Bankruptcy
- You lose control of finances and assets, the official receiver or Trustee appointed on your case will decide what happens to your valuable asset and finances
- Under certain circumstances, bankruptcy can affect types of employment
- It will affect your credit file for six years
- Putting yourself into bankruptcy will cost £680, this can be paid in monthly installments however you will not be afforded the protection of bankruptcy until such time as this is paid
- Depending on if you have proven disposable income and employment status, you may have to pay income payments for up to thirty-six months