If you have debts that you cannot possibly repay, you are effectively insolvent and Bankruptcy may be an option for you. Filing for bankruptcy in the UK is not permanent, so you may file for bankruptcy as a method of clearing your debts for a fresh start.
Bankruptcy is usually used to deal with individuals and not companies as many people think, unlike other methods of dealing with debt, it is a court process. If you file for bankruptcy and are declared bankrupt the court takes away your responsibility for the debt/s and you are protected from creditors taking any action against you. Creditors are no longer allowed to contact you and must stop adding interest or charges to the debt, they cannot take any further legal action against you. Where you are unable to solve your debt problems with a Debt Management Plan, Individual Voluntary Agreement or Trust Deed, filing for bankruptcy may be the only option left.
Declaring bankruptcy in the UK is a complicated process with many pros and cons. It is a legal status that lasts for a year and can help you deal with your debts. When you declare bankruptcy, your non-core assets, such as your properties, possessions and excess income, are used to pay off your creditors. At the end of your bankruptcy period, most of your debts will be cleared.
When it comes to filing for bankruptcy, we understand that you will have many enquiries about its process, advantages and disadvantages. At Debt Helpline, we make the process simpler by providing you with personal bankruptcy advice. Our bankruptcy advisors will understand your financial situation in a non-judgmental manner. They will help you with every step of the process to guarantee that you will receive the best outcome from filing for bankruptcy.
Whether you need help with the filing process or clearing your debts, our advisors will provide you with the best bankruptcy advice. When filing for bankruptcy, an adjudicator will interview you to decide if you can afford to make monthly payments to clear your debts. Our advisors will make sure that you are prepared for the interview by informing you of what to present to the adjudicator to increase the chances of him/her approving your application.
Learn more about filing for bankruptcy in the UK by reading the details below. Don’t hesitate to get in touch with us for any enquiries.
Is Bankruptcy right for me?
Firstly, filing for bankruptcy in the UK is very serious and should never be taken lightly. Our experience is that we are a very proud nation, in embarrassing situations we hide our feelings or try to make things look easy when times are hard. Only consider bankruptcy when you have sought the advice from a professional who can explain the advantages & disadvantages of such a solution. In the UK there are a number of alternatives to bankruptcy that may offer a better solution for you. Once the Bankruptcy Order is made by the Court then the Insolvency Service or a Private Insolvency Practitioner will be appointed to pay off debts using your assets.
How an bankruptcy help you clear your debts?
- It can write off all of the debt you can’t afford
- You can clear your debts in 60 months or less
- It can put a stop to calls and letters from your creditors
- Will consolidate debts to one lower, affordable monthly payment
- It will prevent or stop legal action, including bankruptcy
Do I need to Declare Myself Bankrupt?
Not necessarily, we can provide a range of alternative solutions that could prevent you from such a serious solution as applying for bankruptcy. Bankruptcy has a lasting effect and should only be considered as a last resort. Bankruptcy is a fresh start, a way of dealing with debts that you cannot pay. However it should not be rushed into – be sure to get advice before you take this drastic action.
What are the Advantages of Declaring Bankruptcy?
Once the Bankruptcy Order is made by the Court, settlement of the debts will be taken over by the Official Receiver / Trustee and taken out of your hands. Debt collection procedures will stop so no more letters, phone calls, or bailiffs at the door. Once the Bankruptcy is ‘discharged’ or the period is over most debts are written off and you can make a fresh start. Not all debts are written off – you cannot avoid secured debts like mortgages, court fines or debts from certain court orders.
What are the Disadvantages of Bankruptcy?
It costs you money as you will have to pay Court and Insolvency Service fees, plus administration charges to the Official Receiver / Trustee. Your assets can be sold, it could mean losing your home, car and other valuable possessions. Bankruptcy may be advertised locally and your details will be added to the Insolvency Service’s database. If you own a business it may be sold to pay your debts, it can also include assets you do not have at the moment but expect to get during the period of Bankruptcy future earnings / inheritance etc. After the Order is made you cannot apply for credit of over £500, this is the case until your Bankruptcy is ‘discharged’ without declaring your status. You cannot be a company director until your Bankruptcy is ‘discharged’ You might find it difficult to get a bank account Your status will be kept by Credit Reference Agencies for up to six years, this will mean problems getting mortgages, loans or other credit If you rent a property, your landlord may be informed. Your financial affairs will be open to very close examination by all parties involved. Utility companies may require a security deposit before you can use their services and may even fit a pre-payment meter.
How do I file for bankruptcy in the UK?
If you’re fully decided that declaring bankruptcy is the best option for you, the first thing you have to do is to complete the application forms online. This costs £680. Your application will be reviewed by an adjudicator; if your application is approved, you’ll receive a copy of the bankruptcy order.
Once declared bankrupt, the Official Receiver will interview you. From the interview, they will decide if you can afford to make monthly payments and what will happen to your possessions such as your property or car.
Debt Helpline understands that this is a trying time for you. That is why we are dedicated to finding the best financial solution for you. Call us today for personal bankruptcy advice.