UK Bankruptcy Specialist

What is Bankruptcy?

Bankruptcy is used to solve a serious personal debt problem. If you declare bankruptcy all of your unsecured debt will be taken away from you and you will no longer be responsible for making the monthly payments.

You will only be asked to make regular payments towards your debt if you can afford to do so. You will also be able to keep normal household items. However if you own a car worth more than £1500 you may be asked to sell this and buy a cheaper one.

If you declare bankruptcy, you will risk losing any property you own with equity of over £5000. As such, homeowners must make sure that they take expert advice before going down the bankruptcy route.

Normally after twelve months, you will be discharged from your bankruptcy and any outstanding unsecured debt that you have will be written off for good.

Useful Bankruptcy Links:

More Detailed Bankruptcy Information

Discuss Bankruptcy with others considering Bankruptcy in the Forum

Bankruptcy Forms:

UK Bankruptcy Petition Form

Bankruptcy Statement of Affairs Form

Who is Bankruptcy for?

If you have unsecured debts that you have no hope of repaying in a reasonable period of time, bankruptcy could be the right option for you. However, you need to consider a number of things:

Only unsecured debt included

Unsecured debts such as credit cards, bank loans, catalogues and even VAT or income tax debts can be included in bankruptcy. However, you will have to continue paying secured debts such as a mortgage on a property.

Home owners

If you own a property with more than £5000 of equity, the property may have to be sold to release the equity. For this reason, home owners will normally only choose bankruptcy as a last resort. If you are a home owner, you should not declare yourself bankruptcy without first taking further advice from Bankruptcy Made Simple.

Company Directors

You cannot act as a company director if you are a bankrupt person. As such, if you are an owner director of your own limited company, you need to plan carefully before declaring bankruptcy. However, if you are self employed, as a bankrupt person you can continue to run your business.

How much will Bankruptcy cost?

The standard charge to declare bankruptcy is £600 per person. This sum is payable to the court on the day you declare yourself bankrupt.  If you are receiving certain benefits you may be able to reduce this fee to £340.

You can carry out the bankruptcy process yourself. However, if you want help with the process – for example completing the 30 page application form, this is available from Bankruptcy Made Simple at a one off charge of £350.

What are the advantages and disadvantages of Bankruptcy?

Advantages

All unsecured debt written off –You will no longer be responsible for paying your unsecured debts once you are bankrupt although you may have to make some contributions if you can afford to do so.

Debt free after twelve months - After you are discharged, any outstanding debt will be written off. However, if you have been asked to make monthly payments towards your debt, these may continue after your bankruptcy has finished.

Pay nothing unless you can afford to do so – If you have any disposable income, you may be asked to pay this towards your debt. However, the payments will last for a maximum of three years only.

Keep reasonable personal and household items – If you are declared bankrupt you will be able to keep all of your reasonable household items. This includes washing machines, TVs, DVDs Stereos and home computers.

Disadvantages

Property at risk – If you are a home owner and there is equity in your property, this may be sold if you declare bankruptcy. However, if your property is in negative equity or the equity is less that £5000, you will normally be able to keep your home.

Cars over £1500 may have to be sold – If your car is worth more than £1500, you may be asked to sell this. If you need a car for your work or home life, you will be able to buy a cheaper one. However, the balance of the sale will have to be paid towards your creditors.

Credit rating affected – The record of your bankruptcy will be put on your credit file. This will make it more difficult for you to borrow money in the future. This record will remain on your credit file for 6 years from the date you were declared bankrupt.

Cannot be a company director –You will not be allowed to act as a company director for the duration of your bankruptcy. As such, if you are the owner director of a limited company, you should get further advice from Bankruptcy Made Simple before proceeding down the bankruptcy route.

© BankruptcySpecialist.co.uk
Owned and operated by Wilmott Turner Financial Services Ltd
Consumer Credit License 630668 / Data Protection Reg No. Z2180863

Content Management Software
Hosting by Impresoft
Design by Visual Marketing