UNDERSTANDING
BANKRUPTCY

Bankruptcy is a legal process through which individuals can’t repay their debts. Bankruptcy is done via a Court Order within England, Northern Ireland and Wales.

BENEFITS OF
BANKRUPTCY

Creditor contact is ceased:
You would no longer have to deal directly with your creditors. You would work alongside an official receiver who would oversee your case for the duration of your Bankruptcy.

Debts can be written off within 12 months:
Usually after 12 months of being Bankrupt you’d be discharged.

Benefit only income:
If your income is solely benefit based you wouldn’t need to make any contributions into the Bankruptcy.

Keep household goods:
You will be able to keep things you need to live such as:

Clothes/Bedding/Household equipment

A vehicle you need for a dependent or a vehicle which has been modified for disability.

CONSIDERATIONS OF
BANKRUPTCY

Sale of Assets:
Bankruptcy will take into account your assets, such as your property. These can be sold to pay towards your debts.

Individual Insolvency Register (IIR):
The Bankruptcy is put on the Individual Insolvency Register (IIR) and will remain on your credit score for 6 years. This is a public register, and this is done so that there is a transparent record of all individuals that are insolvent. Details can stay on here for up to 3 months after discharge.

Bankruptcy Restriction Order:
If the official receiver considers it to be justified an application to the courts can be made for a Bankruptcy Restriction Order against you. This can extend the Bankruptcy anywhere between 2 – 15 years.

Work Implications:
In some professions there could be risks when declaring yourself Bankrupt. Its always best to refer back to your contract or check with your HR department.

Costs:
Currently it costs £680 to go Bankrupt. However these can be paid in instalments but during this time your creditors are still able to contact you.

Restrictions:

Once you apply to become Bankrupt you have to follow restrictions such as:

You can’t act as a Director/Insolvency Practitioner/Manage a business with a different name without the courts permission.

Obtain more than £500 without telling the lender you’re Bankrupt.

Excluded Creditors:

Not all debts can be included within a Bankruptcy such as:

–  Student Loans
–  Court fines
–  Child Maintenance arrears
–  Fraudulent debts

*Please note, entering into a debt solution can affect your credit rating for at least 72 months, fees may be payable if ongoing services are provided. A follow up call will be required to confirm details outlined in your enquiry, at which point we will be able to discuss which solutions you qualify for.