What is a Bankruptcy?
Bankruptcy is a formal insolvency procedure which can enable you to become debt free.
If your debts exceed your assets or you are unable to pay your debts when they are due you may be able to apply for a bankruptcy order. There is no restriction on the level of debt you must have to apply.
In order to petition for a bankruptcy, you can apply online through https://www.gov.uk/ which will costs £680 for an application. It can take upto 28 days to be processed, if approved the Official Receiver (trustee) who will oversee your bankruptcy will need to know about your financial history.
An approved bankruptcy will not allow your creditors to take further action on unsecured debts.
Your assets will be considered & may need to be sold to repay your creditors via your trustee. This does not include everyday items you need for your daily needs, however it is ideal to include your house if it is valued more than the mortgage outstanding.
After fulfilling your essential household and personal expenses if you have any additional income, you will need to make payments from your income for up to 3 years. Also known as an income payment order.
Your bankruptcy will be submitted into the public insolvency register.
A Bankruptcy typically lasts for 1 year then you will be released from your debts after your bankruptcy has been discharged
A Bankruptcy will be registered on your credit history for 6 years and it can affect your banking facilities, tenancy and in some cases, employment. You should speak to your debt adviser about the full pros and cons before entering into any debt solution.