UK Bankrupcy and IVA Advice

It's important to understand what bankruptcy is...

If you have debt problems, you may be thinking about the possibility of bankrupcy. It's important to understand what bankruptcy is, and what alternatives exist. Bankruptcy isn't permanent, so you may choose it as a way of clearing your debts and making a fresh start.

It is crucial that consumers are aware that bankruptcy can have quite a long-term impact. Banks and credit providers use an individual's credit file when assessing applications for credit or loans. Bankruptcy can result in them either being declined or paying a premium. It can also affect their ability to get a job, and even get have a mobile phone.

Most debt advice companies want to sell you an IVA and ignore the other options out there. Most still claim an IVA will write off 60% of your debt and will argue an IVA is your only option. Sometimes an IVA does work but you must receive expert, confidential advice. Please also be aware of all the disadvantages of the debt solutions offered.

What is bankruptcy?

Bankruptcy is a legal status that usually lasts for a year (see 'How long does bankruptcy last' below) and can be a way of clearing debts you can't pay. When you're bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). At the end of the bankruptcy period, most debts are 'discharged' (cancelled).

How do you become bankrupt?

A court can declare you bankrupt by issuing a 'bankruptcy order' after it's been presented with a 'bankruptcy petition'.

Filing your own bankruptcy petition

A form (a debtor's petition) can be downloaded from the Insolvency Service website or obtained from county courts with bankruptcy jurisdiction.

When completed the form should be taken to the county court nearest to you that has bankruptcy jurisdiction. A fee of £150 is payable, although this can be waived if you meet specific criteria, when you file the petition.

A deposit of £345, for the Official Receiver's work, is also payable at this time. This amount cannot be waived.

The fact you were bankrupt is held on your credit file for six years. Lenders use credit information to make lending decisions, which could make it difficult for you to obtain credit including mortgage, mobile phone, loans, and credit cards.

Common Misspellings of bankruptcy:-

• Bankrupty
• Bancraptcy
• Bancrupsty
• Bankrupcy
• Bancrupsy
• Bakruptcy
• Bankrupsy
• Bancruptcy
• Bakrupcy
• Bancrupcy
• Bancruptsy
• Bakruptsy
• Bankruptsy

At Money Advice Direct we believe there are many ways to clear debt and will examine all your options before allowing you to decide.  If you need help then you can Money Advice Direct on 0800 074 6918 or apply online.

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