Bankruptcy
Need Help Going Bankrupt?
Bankruptcy stands as a well-established option for individuals grappling with substantial debt issues in the UK (excluding Scotland) at present. Individuals with minimal or no disposable income for creditor payments increasingly turn to Bankruptcy as a means to address their debt challenges.
Our evaluation team will engage in discussions with you to determine your eligibility for Bankruptcy and to elucidate its impact on your situation. Generally perceived as a last resort for resolving debt issues, Bankruptcy becomes a viable option when other debt solutions prove unsuitable. In such instances, you will receive information about organizations capable of assisting you through the Bankruptcy process.
What happens when you become Bankrupt?
Over an extended period, the majority, if not all, of your unsecured debts will be eliminated, leaving you with debts outside the scope of bankruptcy (such as secured debts, non-provable debts, student loans, and specific benefit overpayments), or possibly no debts at all. In the short term, bankruptcy prevents debt and bill collectors from harassing you for money related to debts included in the bankruptcy. Concerning your job, for most individuals with livelihoods, being protected by bankruptcy does not usually have an impact. However, exceptions may exist. It is advisable to seek professional advice or consult your employer's HR Department before initiating this process.
What problems can arise from declaring Bankruptcy
Opting to declare bankruptcy is often seen as a last resort, considering its more invasive nature and the accompanying limitations. Normally, these restrictions are imposed for a period of 12 months from the bankruptcy order date. Although the standard procedure involves granting discharge after this 12-month period, there are instances where the duration may be extended.
3 Steps to Bankruptcy
1. Apply Online
Complete an online application via the Insolvency Service website at www.gov.uk. This needs to include details of your debts and your income and expenditure.
2. Costs
You will be required to pay a fee of £680 before your application can be considered. This can be paid in instalments. In certain circumstances, you may be able to get some help with this.
3. Decisions
Your bankruptcy application will be considered by an adjudicator who will if appropriate make the bankruptcy order. Shortly after the order is made, you will receive a copy of it. You may be interviewed about your situation by the Official Receiver (“The OR”).
Key Facts about Bankruptcy
Declaring bankruptcy brings forth various repercussions: Prohibition from acting as a company director. Disclosure of bankruptcy status is required when managing another business, impacting relationships with business associates. Explanation of bankruptcy is necessary when seeking credit exceeding £500. Potential impact on employment, particularly in managerial or professionally qualified positions; refer to your employment contract or consult your HR department for clarification. If you own a business, especially one with overheads like rent, it is likely to be closed by the Official Receiver (OR)/Trustee. Bankruptcy significantly hampers your credit rating, making it challenging and potentially more expensive to secure future credit. Legal obligations mandate cooperation with the OR/Trustee, and any misconduct may result in extended restrictions or suspended discharge. If you own a home with equity, the OR/Trustee has the authority to sell it to realize the equity. The OR/Trustee is duty-bound to investigate and potentially overturn prior transactions, including asset disposals and payments made, particularly those involving connected parties.
Am I Eligible
Do I qualify? Unsecured debts surpass £5,000. Capable of meeting the £680 fee. Possess minimal or no disposable income for debt payments.
The steps to Bankruptcy
To initiate the process: Fill out an online application on the Insolvency Service website at www.gov.uk, providing details about your debts, income, and expenditure. Prior to reviewing your application, a fee of £680 must be paid, with the option for installment payments. Financial assistance may be available in certain situations. An adjudicator will assess your bankruptcy application, and if deemed suitable, issue the bankruptcy order. Following the order, you will receive a copy and may undergo an interview with the Official Receiver ("The OR"). Generally, bankruptcy discharge occurs within one year. The Official Receiver assesses the presence of any assets, such as a property, which could be sold to contribute to creditor payments. If you have a monthly disposable income after essential living costs, you might be required to make payments through an Income Payments Agreement/Order lasting for 3 years. Depending on circumstances, an external Trustee, often an Insolvency Practitioner, may be appointed.
Bailiff Advice Online is a trading style of My Debt Plan Ltd.
Registered address 2nd Floor Blenheim Court, Cheadle, Cheshire, England, SK8 2JY Company Registered in England and Wales Number 10992838 Data Protection ZB284067.
My Debt Plan Ltd provides insolvency solutions to individuals, specialising in IVA’s. All advice given is provided in reasonable contemplation of an insolvency appointment. Where you are not suitable for an IVA, we may refer you to one of our trusted partners who specialise on alternative solutions.
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Kevin Mapstone is a licensed insolvency practitioner in the UK by the Insolvency Practitioners Association (IPA).
To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.
*Our advice on your options is always free and we will notify you if a solution you choose has a fee associated with it.
