You have to pay a total fee of £680 to go bankrupt. You can pay the fee online when you apply. If you cannot afford to pay the full fee all at once, you can pay the fee by instalments of at least £5 however you must pay the full fee before you can complete your application.
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.
If your case is administered by the official receiver, the following fees will be deducted from the money realised: an administration fee of: £2,390 if you applied for your own bankruptcy, or £3,300 if someone else applied to make you bankrupt (creditor petition bankruptcy), a general fee of £7,200, 15% of the total value of assets realised, a fee charged at an hourly rate where money is paid to creditors (known as a ‘distribution’ fee). If your bankruptcy is being handled by an insolvency practitioner then the administration and the general fees will still be charged, but they will charge their own schedule of fees rather than the asset realisation and distribution fees that the official receiver would charge.
Certain jobs such as an accountant or trustee of a charity cannot be held if you are made bankrupt. We would always recommend that you check with your employer first if you have concerns.
You have to pay a total fee of £680 to go bankrupt. You can pay the fee online when you apply. If you cannot afford to pay the full fee all at once, you can pay the fee by instalments of at least £5 however you must pay the full fee before you can complete your application.
You can apply for bankruptcy by completing an online application. Once this is completed it is sent to the Insolvency Service. You do not have to go to a court hearing. An adjudicator will check your application to make sure that you cannot pay your debts as they fall due and will decide whether to make a bankruptcy order within 28 days of receiving your application.
An Official Receiver is appointed by the Secretary of State and is an officer of the court. Their job is to take charge of administering your bankruptcy and protecting your assets from the date of the bankruptcy order. They will be trustee of your bankruptcy estate unless an insolvency practitioner (IP) is appointed. Insolvency practitioners are people who specialise in Insolvency. They must be authorised by an appropriate professional body. The IP can be trustee instead of the Official Receiver. They are then responsible for disposing of your assets and your payments to your creditors. Anchorage Chambers have insolvency practitioners who are able to act as trustee for you.
At Anchorage Chambers our licenced Insolvency Practitioners are regulated by the Institute of Chartered Accountants in England and Wales (the ‘ICAEW’).
If you own your home your interest in the home will form part of your estate which will be dealt with by your trustee. If you own it, or are paying a mortgage, the house may have to be sold to go towards paying your debts. If you have a spouse or children living with you, it may be possible for the sale in the bankruptcy to be put off until after the end of the first year of your bankruptcy. This gives time for other housing arrangements to be made. Your husband, wife, partner, a relative or friend may be able to buy your interest in your home from the trustee.
If you were made bankrupt on or after 1 April 2004, you will be automatically freed from bankruptcy (known as “discharged”) after a maximum of 12 months. This period may be shorter if the Official Receiver/IP concludes his enquiries into your affairs and files a notice in court. However, if you are required to make payments into the bankruptcy then this will normally continue for 3 years.
Once it has been made, it is advertised in “The London Gazette” (an official publication which contains legal notices) and in a local or national newspaper (or both). It will also appear on The Insolvency Register.
It will certainly affect your credit rating adversely. However, your credit rating may be already quite low if you have missed some payments or made late payment to your creditors. As with any formal debt solution, a bankruptcy will stay on your credit report for the greater of six years from the date it starts.
MoneyHelper joins up money and pensions guidance to make it quicker and easier to find the right help. MoneyHelper brings together the support and services of three government-backed financial guidance providers: the Money Advice Service, the Pensions Advisory Service and Pension Wise.
Anchorage Chambers is a trading style of Anchorage Chambers Limited Company Registered in England Number 09164704; All calls are recorded for monitoring and training purposes. Please note details of our Privacy Notice can be found on our website https://www.anchoragechambers.co.uk. Alison McKnight (23670) and Richard Teague (19570) are licensed in the UK to act as Insolvency Practitioners by the Institute of Chartered Accountants in England and Wales. Our insolvency work is subject to the Insolvency Regulations & Guidance Notes and the Statements of Insolvency Practice, and the Code of Ethics of the ICAEW.
