Bankruptcy

Bankruptcy can help you rid yourself of debt which would otherwise take many years to clear.

How does bankruptcy work?

It is a form of insolvency, so your unsecured debts need to outweigh your assets, such as property or vehicles, for it to be considered.

If you make yourself bankrupt, your creditors write off your unsecured debts. This allows you to have a fresh start.

Is there a cost to go bankrupt?

There is a fee to go bankrupt. The fee is £600. You pay £150 to the court and £450 to the official receiver. If you have a low income or receive benefits, you may be exempt from the court fee allowing you to go bankrupt for £450.

How would bankruptcy affect me?

Bankruptcy normally lasts for a year. You cannot borrow any further money and would have to declare any changes within your circumstances to the official receiver during this year. You may be asked to sell valuable assets, but you are able to keep most of the things you need for day-to-day living.

Is bankruptcy suitable for me?

Making yourself bankrupt is a big step to take and requires expert advice. If you are considering making yourself bankrupt, you can use our online debt counselling service, which will provide you with the most appropriate solution to your debt problem. Alternatively contact our free Helpline on                 0800 138 1111.

If it is an option for you and you decide to go ahead, we can also offer you extra support through our bankruptcy support team. They can answer any questions you have about bankruptcy.

    

FAQs

England and Wales > Debt solutions > Bankruptcy
  • If you are a homeowner and you remain living in the property after bankruptcy your mortgage and any other secured loans would still need to be paid
  • Student loans would be excluded
  • Most court fines would be excluded. You would need to make an arrangement to pay these
  • Child maintenance arrears cannot be included. You would need to make an arrangement to pay these
England and Wales > Debt solutions > Bankruptcy

If you are a homeowner and have equity in your property, it is likely that you would be made to sell it. This would be needed in order for you to use the equity towards the debts that you owe.

It may be possible to safeguard your home if a family member or friend is willing to buy your share of the property (usually expected to be the market value of your share of the property). This enables the equity to be released, but still allows you to stay in your home.

If your property is in negative equity, where your mortgage is more than the property is worth, you may be given the opportunity to keep your home.

Other debt solutions may be more appropriate and allow you to keep your property. If you would like to know if bankruptcy is the right solution for you please use our online counselling service or call our free Helpline on 0800 138 1111.

England and Wales > Debt solutions > Bankruptcy

Yes. You would still be allowed to operate a basic bank account whilst bankrupt.

England and Wales > Debt solutions > Bankruptcy

It may do. If you are unsure whether bankruptcy may affect your job, you must check the terms and conditions of your contract of employment. You can also speak to your union representative or personnel department.

You are not able to act as a director of a limited company.

© Consumer Credit Counselling Service 2009