What is Bankruptcy?
Bankruptcy is a way of dealing with debts that you cannot pay.
Becoming bankrupt is a very difficult decision but you might want to think about bankruptcy if you have no money to pay your debts, or have so little that it will take you years to repay them but it may cost you up to £680 to go bankrupt.
Once you have been made bankrupt, you don’t have to deal with your creditors directly as this will be done by your Trustee or the Official Receiver as they will make sure that your assets are shared out fairly amongst your creditors.
When the bankruptcy order is over, you can make a fresh start and the money you owe is written off. In many cases, this can be after only one year.
Examples of how bankruptcy could affect you:
- If you own your own home, it might have to be sold together with any luxury items of value you own.
- You may not act as a director of a company without leave of the Court. You also cannot be involved in the formation or management of a company without leave.
- There are some debts such as court fines and student loans that cannot be included.
- Your details will be listed in the Insolvency Register, which people can access on the internet.