Bankruptcy
What is Bankruptcy?
Bankruptcy is a formal insolvency solution which writes off debts that you:
- Are unable to afford to pay, or
- Are making small payments towards and feel will not be cleared in a reasonable time frame.
Who can apply for bankruptcy?
Anyone can apply for bankruptcy, but it is best to speak to a debt advisor and discuss all available options as bankruptcy can have an impact on assets you own. Creditors can also ask the courts to make a client bankrupt if they owe at least £5000.
Advantages
- You can be discharged after 12 months
- Once your bankruptcy is discharged, all included debts are written off
- You can pay the fee online in instalments and your bankruptcy application will begin once your fee has been paid in full
- Bankruptcy will prevent your creditors from taking or continuing with any legal action
- All interest and charges will be frozen
Disadvantages
- There are certain debts that cannot be included in a bankruptcy, such as student loans, CSA arrears and court fines
- Bankruptcy costs £680 per person
- Bankruptcy will adversely affect your credit rating and, your ability to gain credit will be limited and the bankruptcy will remain on your credit file for 6 years
- Once you are declared bankrupt an Official Receiver or Trustee will take control of your estate which could result in any assets being sold
- If you can afford to make a payment, you will be asked to do so for up to 3 years