What is Bankruptcy?

Bankruptcy is an option if you are completely unable to pay back your debts and a court appoints a trustee or Official Receiver to take over the management of your financial affairs for a limited period of time.

The Official Receiver will be entitled to sell your assets - such as your house and possessions - in order to raise the money needed to pay off your creditors.

When is Bankruptcy an option?

You can opt to declare yourself Bankrupt voluntarily if you know your debts are unmanageable and there's nothing else you can do, or you could be forced into Bankruptcy if your creditors petition the court because you weren't paying what you owe them.

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Bankruptcy generally lasts for 1 year, but remains on your credit file for 6 years, during which time your ability to obtain credit will be hindered. It will generally become easier to get credit towards the end of the 6 years and onwards.

Whilst you may be discharged from bankruptcy within a year, if you are asked to make contributions from your income these are likely to continue for a further 2 years (3 years in total).

How can Bankruptcy affect your future?

Bankruptcy has some other serious effects on your future, so it's best to get all the information you can and see if there's anything you can do to avoid it.

Bankruptcy Fees

The Official Receiver (an officer of the court) is involved in every bankruptcy. An insolvency practitioner may also become involved.

How much?

£150 court fee. This may be waived by the court in certain situations eg if your are on income support.

£450 (increasing to £525 by 1 June 2011) deposit towards the cost of administering your bankruptcy. This is payable in all cases, however, there are some charitable trusts which will pay the deposit on your behalf in cases of severe financial hardship, and you should contact your local Citizens' Advice Bureau for details of such charitable Trusts in your area.

Fee to swear the statement of affairs. In a county court no charge is made, but £7 is charged in the High Court or before a solicitor .

What are the alternatives to Bankruptcy

Bankruptcy is considered as the last resort. Other alternatives which should be considered before bankruptcy are:

IVA

Debt Management

Can debt solutions help me get out of debt?

YES we can. Everyone’s personal situation is different and each debt solution is different so we need to work out which will best suit your financial needs.

We will complete a FREE 20 minute fact find with you to work out what your earning and spending and this will let us know how much you can afford to pay to your creditors and also which debt solution is best for you to help you get out of debt. You are under no obligation but I am sure you will be 100% happy with what out debt advisors can do for you and we have the lowest debt managenent fees in the industy

We pride ourselves in our friendly, professional approach to finding the right debt solution for every one of our clients, which is honest, confidential and always the ‘best advice’ based on your individual circumstances.

If you would like to speak to one of our friendly, professional debt experts about any of our debt solutions you can either call our debt solutions helpline on: 0845 159 6093 or complete our online contact form and one of our debt advisors will call you back within the hour.

Start you debt free life today! with one of our debt solutions.

Debt Management | Individual Voluntary Arrangement | Protected Trust Deed | Bankruptcy

Also have a look at out "DEBT FEEs" chart and see what the more popular debt management companies are charging.