Bankruptcy

Most creditors can’t pursue you for your debts once you have been made bankrupt.

The Official Receiver, a government agency responsible for controlling people’s affairs during bankruptcy, will investigate the reasons for bankruptcy.

Your bankruptcy will normally be discharged (ended) within a year. However, if you have disposable income (income left over after you have paid essential living expenses), the Official Receiver may ask you to make regular payments at a level you can afford for up to three years. If you refuse to pay because you believe this level is more than you can afford, the Official Receiver may apply to the court, which will decide what you should pay.

Bankruptcy is not an easy option, and you should not make the decision lightly. It is normally the right option when you have large debts that will take many years to repay and no assets.

It may not be suitable if you: -

• Have a certain type of job (for example if you work in finance or you are a Solicitor)

• Own (or are buying) your own home

• Have other assets; or

• Are likely to inherit money or goods during the bankruptcy period

And there are some types of debt you will still have to pay after bankruptcy:

• Magistrates fines

• Maintenance for a partner or children

• Debts from fraud; and

• Student loans

Finally, you must make a lump-sum payment, including:

• £360 to the Official Received; and

• £150 court fee

You can apply to have the court fee waived if you are receiving certain benefits or you can’t afford to pay