Bankruptcy is a statutory process and is a form of personal insolvency which is used to wind up the affairs of someone who is unable to pay their debts. The majority of people who go into Bankruptcy choose to do so voluntarily. Bankruptcy Orders can be obtained by creditors against people who do not pay their debts although a creditor who wishes to obtain a Bankruptcy Order against an individual must be able to prove that the individual owes the creditor more than £5,000.
Bankruptcy is normally only suitable if you are not able to pay your debts in a reasonable period of time. While the stigma associated with Bankruptcy has largely disappeared in recent years most people continue to prefer alternative solutions to Bankruptcy for managing payments of their debts such as Individual Voluntary Arrangements (IVAs) for informal debt management plans.
The process for making yourself bankrupt is straightforward. Application forms can be downloaded from the Government insolvency service website or alternatively the forms will be supplied by the local county court. Once the forms have been completed you hand them in to the County Court and also pay the Court fees which the Court requires before processing your application. In most cases the Court will grant the Bankruptcy Order on the day you lodge the forms with the Court. This means that you will be made bankrupt the same day you hand the forms to the Court.