Bankruptcy is a way of dealing with debts that you cannot pay.
Becoming bankrupt is a very difficult decision and it should only be taken as a last resort but you might want to think about bankruptcy if you have no money to pay your debts, or have so little that it will take you years to repay them but it may cost you up to £705 to go bankrupt.
Once you have been made bankrupt, you don’t have to deal with your creditors directly as this will be done by your Trustee or the Official Receiver as they will make sure that your assets are shared out fairly amongst your creditors.
When the bankruptcy order is over, you can make a fresh start and the money you owe is usually written off.
In many cases, this can be after only one year.
Examples of how bankruptcy could affect you:
- If you own your own home, it might have to be sold together with any luxury items you own.
- You may not act as a director of a Company.
- There are some debts such as court fines and student loans that cannot be included.
- Your details will be listed in the Insolvency Register, which people can access on the internet.
You must pay the court fee and deposit yourself, currently £705 per person (subject to some concessions).
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