This legally binding debt solution involves your assets being transferred to the Official Receiver (subject to certain exceptions). They are then sold in order to clear your debt as much as possible and to pay the costs of administering your bankruptcy. This is usually considered a “last resort” for anyone who is struggling financially.
What is the definition of bankruptcy?
Bankruptcy is a form of personal insolvency used to wind up your affairs if you’re unable to pay your debts.
Most people who apply for bankruptcy choose to do so voluntarily. However, bankruptcy orders can also be obtained by creditors against people who do not pay their debts (if they can prove the individual owes them more than £5,000).
During bankruptcy, your assets will be sold to pay creditors. The process usually lasts for one year, after which all your remaining debts are written off. Although you are likely to be free from bankruptcy after a year, this does not mean that any unsold assets will belong to you. These will still be held by the Official Receiver or your Trustee in Bankruptcy and will be sold to pay your debts.
Is bankruptcy an option for me?
Bankruptcy is generally only suitable if you are not able to pay your debts in a reasonable period of time.
Whilst the stigma associated with bankruptcy has largely disappeared in recent years, Individual Voluntary Agreements (IVAs) are still preferred by most people as an alternative to going bankrupt.
When bankrupt, you will not be able to direct a company and you will be restricted from obtaining loans or credit.
How do I make myself bankrupt?
The process for making yourself bankrupt is straightforward. All you need to do is download the necessary application forms from the Government’s Insolvency Service website. In some cases, these forms will be supplied by the local county court.
After completing the bankruptcy forms, the paperwork must be handed in to the County Court. A processing fee is payable.
The court will usually grant the bankruptcy order on the day you file the forms – making you officially bankrupt immediately.
Let Bennett Jones guide you through bankruptcy
Bankruptcy can be an unsettling process. Bennett Jones is here to provide the support at this difficult time, so you can take positive steps to recovery.
If you are still uncertain whether bankruptcy is the best option for you, contact our team using our Freephone number: 0800 7710 073. We’ll provide you with the information you need to make an informed decision.
You can also send a message using our contact form and we’ll call you back at a convenient time for you.