Bankruptcy is one way of dealing with debts you cannot afford to repay. It is a court order that you can apply for if you have unmanageable debts. It may be the best way for you to free yourself from excessive debts but the decision should not be taken lightly.
Pros of a Bankruptcy
- Once you have completed the bankruptcy you will be completely free from any unsecured debts that were included in the bankruptcy proceedings.
- Bankruptcy provides automatic discharge after one year – less in some cases – and with that comes relative peace of mind.
Cons of Bankruptcy
- Your assets, including your home and car, can be included and sold to raise money to repay creditors.
- You won’t be able to act as a director of a company
- You will need court permission to take any part in the management of a limited company
- It may be difficult to obtain credit in future, as a record of the bankruptcy order will stay on your credit history for up to six years
Bankruptcy fees vary throughout the UK. In England and Wales bankruptcy fees total £705. You pay a £180 fee to the court and £525 to the official receiver. If you have a low income or receive benefits you may be exempt from the court fee, allowing you to go bankrupt for £525.
For more information on bankruptcy in England and Wales, click HERE
For more information on bankruptcy in Scotland, click HERE
For more information on bankruptcy in Nothern Ireland, click HERE