All About Bankruptcy
Bankruptcy is a way of dealing with your debts if you are unable to pay them. It offers you a fresh start after you are discharged.
Criteria for Bankruptcy
- You are a resident in England and Wales
- You owe more than £5,000 in unsecured debt
- You are unable to pay your debts
- You have not been declared bankrupt in the last 6 years
- You are not subject to a Debt Relief Order
Bankruptcy advantages
- All interest, charges and debt collection activity will stop.
- You may be able to keep essential household goods.
- The application process can be completed online if you live in England or Wales.
- You can pay the cost of applying for bankruptcy in instalments.
- You will normally be discharged after 12 months.
Things to consider
- The official receiver may sell your assets to pay your creditors if they are of high value or have sufficient equity.
- You may have to pay into the bankruptcy for up to 3 years if you have excess disposable income.
- Bankruptcy is shown on a public register.
- Your bankruptcy will show on your credit report for at least 6 years from the date it commences, and you will not be able to take out further credit.
- Bankruptcy may affect your job - always check the terms of your employment contract.
Bankruptcy Frequently Asked Questions
All Bankruptcy FAQsBankruptcy is a way for an individual to deal with debts that they are unable to pay. Any available assets are shared amongst those that you owe money to, and it enables you to make a fresh start after you have been discharged.
A bankruptcy order can be made for one of three reasons: • you cannot pay what you owe and want to declare yourself bankrupt • your creditors apply to make you bankrupt because you owe them £5000 or more • an insolvency practitioner makes you bankrupt because you’ve broken the terms of an IVA
Most unsecured debts other than debts such as court fines and student loans are covered under a bankruptcy. This can include credit cards, store cards, payday loans, overdrafts personal loans and more. Trading debts including debts owed to suppliers (if you are no longer using them to trade) and H M Revenue and Customs are also covered under a bankruptcy. Discharge from bankruptcy releases you from most of the debts you owed at the date of the bankruptcy order. Exceptions include debts arising from fraud and any claims which cannot be made in the bankruptcy itself.
Your payments to the bankruptcy will depend on different factors of which your income will play a major role. Your monthly expenditure and your personal circumstances will also be taken into consideration. You will only be asked to pay what is affordable for you and if you are in receipt of benefit only income then you will not be expected to pay anything. Payments into bankruptcy are for three years.
Contact Us
If you are having a difficult time financially our team will be happy to discuss your available options. Fees will apply in some solutions, and your credit rating may be affected.