Bankruptcy

Find Out If Going Bankrupt Is Your Best Option And Alternative Solutions

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What Is Bankruptcy?

Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.

If you’re in severe financial difficulty and are considering going bankrupt, you’ll probably have lots of questions about it.Here we’ll tell you more about what bankruptcy is. Remember, bankruptcy might not be your only option and it might not be the best one for you.

Bankruptcy Information

Who Can Apply For Bankruptcy?

You can apply to make yourself bankrupt if you can't pay your debts. Get expert advice before making the decision from Free Debt Helpline and there may be another way.
It’s always best to talk things through with an experienced debt adviser before you decide to apply for bankruptcy.
 

Should You File For Bankruptcy?

Filing for bankruptcy is often seen as a scary but open option. But it’s important to know that when you’re facing what seems like financial ruin, you have choices. It’s really important you don’t make a decision to go bankrupt alone. Talk to a free debt adviser first.

Bankruptcy Declaration

Declaring yourself bankrupt should always be considered a last resort for those who feel unable to pay off debt. It's a viable, if undesirable option for those with no income. You should always check if there are other ways to deal with your debts before you apply for bankruptcy.

Bankruptcy Alternatives

Free Debt Management Plan

Debt Management Plans are available across the UK although people don’t take advantage of them. So regardless of where you live in the UK, if you’re struggling to keep up with payments to your debts.  A DMP can help get everything in order, therefore making things that little bit more manageable to help ease stress over debt problems.

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Individual Voluntary Arrangement

An Individual Voluntary Arrangement (IVA) is a formal and legally-binding agreement between you and your creditors to pay back your debts. This is agreed over a period of time and any remaining debt after this is written off. An insolvency practitioner deals with the creditors throughout the duration of the IVA so you don’t have to.

 

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DRO

A debt relief order (DRO) is a way to have your debts written off if you have a relatively low level of debt and have few assets. If you qualify, our specialist DRO team can apply to the Insolvency Service for you. Debt relief orders are not available if you live in Scotland.

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Bankruptcy: Advantages and Disadvantages

Advantages of Bankruptcy

  • You can be discharged after 12 months
  • Once your bankruptcy is discharged, all included debts are written off
  • You can pay the fee online in instalments and your bankruptcy application will begin once your fee has been paid in full
  • Bankruptcy will prevent your creditors from taking or continuing with any legal action
  • All interest and charges will be frozen

Disadvantages of Bankruptcy

  • There are certain debts that cannot be included in a bankruptcy, such as student loans, CSA arrears and court fines
  • Bankruptcy costs £680 per person
  • Bankruptcy will adversely affect your credit rating and, your ability to gain credit will be limited and the bankruptcy will remain on your credit file for 6 years
  • Once you are declared bankrupt an Official Receiver or Trustee will take control of your estate which could result in any assets being sold
  • If you can afford to make a payment, you will be asked to do so for up to 3 years

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