Bankruptcy
Bankruptcy is a legal process that will clear most of your debts.
If you have assets they will usually be sold to help pay back your creditors, however you will be able to keep your personal belongings and essential household items. You may be able to avoid selling your home if your spouse or partner can buy your share of its value after any secured debts have been paid. Bankruptcy usually lasts one year, and once you have been freed (discharged) from your bankruptcy, you are cleared of your debts.
Automatically free of debt?
Yes, except debts that are excluded from the bankruptcy
Length of time?
Usually 1 year until you are ‘discharged’
*Is there a fee?
£680 (this is made up of an application fee of £130 and a bankruptcy deposit of £550)
Which debts are excluded?
Court fines, CSA obligations, student loans, secured debts, damages, personal injury, Social Fund crisis or budgeting loans, and fraud
Impact on assets?
The Official Receiver may require assets to be sold and used to pay back to your creditors
Impact on employment?
Possibly, depending on the type of job you do
Credit rating affected?
Yes
Am I eligible?
You owe more than £750
You do not have enough disposable income to pay your debts over
a reasonable period of time (usually 5 years)
An IVA or DRO is not a more appropriate option
How do I apply?
Bankruptcy petitions are made online. Crosslight will assist you with the process and help you complete the necessary application – you will not need to attend Court. If your bankruptcy is approved, you may need to attend an interview with the Official Receiver.
What else do I need to know?
Debts included are written-off when the bankruptcy order is made. However, if you have surplus income you may have to make payments for up to 3 years
Any business you have will most likely be closed and your employment might be affected. Certain professionals are barred from practising after bankruptcy
Until you are discharged, you cannot act as the director of a company or be involved in its management unless the court grants permission
If you act dishonestly or irresponsibly you can have a bankruptcy restrictions order invoked for 2 to 15 years
Until you are discharged, it will be illegal for you to borrow £500 or more without telling the lender you are bankrupt
The bankruptcy is entered into the Insolvency Register and listed in the public domain
Feeling overwhelmed by debt or money worries?
Speak to one of our a debt advisors.