Bankruptcy – Is it right for me?
With recent figures showing that household debts are increasing, consumers struggling to tackle their debts may consider bankruptcy as a final option in their attempt to take control of their financial situation.
Bankruptcy allows individuals to be free from mounting debts, subject to certain restrictions, while ensuring that their assets are shared out fairly between creditors.
How can I apply for bankruptcy?
In order to apply for bankruptcy you will need to complete both a Debtor’s Petition and Statement of Affairs to be presented to the county court nearest to where you work or live, alongside a payment of £700 comprising of a court fee and deposit on petition.
In some circumstances the court can opt to waive the court fee (£175), however, this petition fee of £525 is payable under all circumstances.
What potential outcomes are there from my bankruptcy petition?
There are many potential outcomes from a bankruptcy hearing. This includes the court making a bankruptcy order or dismissing the petition; if, for example, they feel that an administration order would be a more suitable option from your case.
If the court feels that a Debt Relief Order may be more appropriate then they will grant an order referring you to an approved intermediary.
The court may also delay or stay proceedings if they feel that additional information is needed in order for them to reach a decision on your bankruptcy order.
Finally, if your assets exceed £4,000, and your unsecured debts are less than £40,000, and you have not had an IVA or bankruptcy in the last five years, the court can appoint insolvency practitioners to guide you through the process of an individual voluntary arrangement.
What will a bankruptcy mean for my financial situation?
Once a bankruptcy order is granted you will be listed on the Individual Insolvency Register, and it is normally 12 months before you are discharged from your bankruptcy order.
This will have a bearing on your applications for credit, and also limit which lenders you can bank with, as well as the nature of the account you can hold.
If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1143.