If you are in severe financial difficulty and are considering going bankrupt, no doubt you will have many questions. You will also want to know more about what bankruptcy is.
Bankruptcy is a form of insolvency. That means your unsecured debts need to outweigh your assets (property, vehicles, etc) for bankruptcy to be considered.
If you make yourself bankrupt, your creditors write off your unsecured debts. This allows you to make a fresh start. But there are restrictions for the 12 month period of bankruptcy.
The cost of bankruptcy
To file for personal bankruptcy you must pay £700 in fees; £175 goes to the court and £525 to the Official Receiver. However, if you have a low income or receive benefits you might be exempt from the court's fee.
The normal term for bankruptcy is 12 months. During that time you are subject to a number of restrictions and have to declare any changes to your circumstances to the official receiver. You might also have to sell valuable assets, although you are able to keep most of the things essential to your day-to-day lifestyle. The official receiver will investigate your situation and spending over the last 3 years.
Bankruptcy counselling
Bankruptcy can be a huge step to take and you need expert advice before embarking on the process.
If you are considering making yourself bankrupt, use our online debt counselling service, CCCS Debt Remedy, which will identify the most appropriate solution to your debt problem.