Bankruptcy is a legally binding debt solution that’s often used as a last resort if you cannot repay your debts in a reasonable amount of time.

Bankruptcy is available to those living in England, Wales and Northern Ireland. It is a formal insolvency process whereby your debts are written off. You can apply for bankruptcy if you owe a minimum of £5000 but will have to pay a fee of £680 when you apply through the high court.

You can put all your unsecured debts into your application for bankruptcy, including mortgages, however, you will have to surrender your home. Once you enter into bankruptcy, the companies you owe money to are no longer allowed to contact you or take further or legal action against you.

Bankruptcy typically lasts up to a year, and at the end, any remaining debt you have is written off. Your bankruptcy will be put on the public record and can affect your working opportunities.

Advantages of Bankruptcy

  • You no longer have to deal with creditors and communicate with them.
  • Legal action can no longer take action against you.
  • You can keep enough money to live on as well as essential belongings. You can also keep a vehicle up to the value of £1000 or less if you need it for working purposes.
  • You will be allowed to keep your home if it has little to no equity in it.

Disadvantages of Bankruptcy

  • You must pay a fee of £680 to apply for bankruptcy.
  • Your bankruptcy will be put on public record.
  • It is likely your home will be sold if it has a lot of equity in it.
  • Some jobs are affected by bankruptcy. For example, you will no longer be able to work as a company director or be involved with the management of a limited company. You will no longer be able to practice as a solicitor, accountant or in financial services.

Get in touch with us about Bankruptcy today