Bankruptcy Questions & Answers
Frequently asked questions and answers relating to filing for personal bankruptcy.
What is bankruptcy?
How do I become bankrupt?
What are the bankruptcy costs and fees?
What are the advantages of bankruptcy?
What are the disadvantages of bankruptcy?
How long does bankruptcy last?
Will I lose my home and possessions?
What are the alternatives to bankruptcy?
What is a Debt Relief Order?
What is bankruptcy?
Bankruptcy is a way of dealing with overwhelming debt problems. If you are faced with debts that you simply are unable to repay then bankruptcy is an option. By becoming bankrupt you can clear your debts and make a fresh financial start.
How do I become bankrupt?
A bankruptcy order can be made only after bankruptcy petition has been presented to the court. This petition can be presented either by yourself or by anyone to whom you owe at least £750. When petitioning for your own bankruptcy you can get the necessary forms from your local court of from the insolvency service website.
What are the bankruptcy costs and fees?
When becoming bankrupt there can be as many as three fees to pay. A deposit of £450 to cover the costs of administering the bankruptcy is payable in all cases. A court fee of £150 is also charged except in certain circumstances such as if you are claiming income support. Finally if your case is being heard in the High Court then there is a £7 fee for the swearing of the statement of affairs.
What are the advantages of bankruptcy?
By becoming bankrupt you allow someone to step into your shoes and deal with your financial affairs on your behalf. Your debts are dealt with and at the end of the bankruptcy period you are left to start afresh.
What are the disadvantages of bankruptcy?
When you become bankrupt any of your assets can be sold to pay off your debts. This can include your home, car or any valuable assets. Your bankruptcy will be listed in your local newspaper and you may find it more difficult to obtain future credit.
How long does bankruptcy last?
Typically bankruptcy will last for one year after which you are discharged. Being discharged however is not automatic and may be delayed by the court. Even after being discharged your bankruptcy will appear on your credit file for a minimum of six years.
Will I lose my home and possessions?
Once you have become bankrupt all of your assets including your home are placed under the control of the appointed trustee or insolvency practitioner. In some cases your home may then be sold and the funds then used to pay off your debts. This can apply whether your property is freehold or leasehold and whether it is jointly or solely owned.
What are the alternatives to bankruptcy?
For people with financial problems filing for bankruptcy isn’t the only option. Depending on your circumstances an Individual Voluntary Arrangement (IVA), debt management plan or a debt relief order may be a more suitable option.
What is a Debt Relief Order?
Debt Relief Orders were introduced in April 2009 as a means of allowing people to apply for personal bankruptcy without going through the full bankruptcy procedure. A Debt Relief Order is a cheaper option than bankruptcy but is only available if you meet certain criteria including the size of your debts and your savings and assets.
If you would like to take the 10 minute assessment or need further information, without obligation, on the many options available to you then call us free today on 0800 043 50 43 or complete our Enquiry Form and we will ring you back at a more suitable time.
Alternatively if you have any specific questions about bankruptcy or its alternatives then fill in the below form. Just enter your query and one of our groups impartial debt advisors will get back to you.
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