Bankruptsy Advice

Think carefully about the implications...

Bankruptsy protects you from people you owe money to and allows you to start afresh, but you need to think very carefully about all the implications it will have before making the big decision.

Bankruptcy is an option that everyone has but which should always be a last resort. It is an option that often has to be considered when an individual is not able to pay their debts. In the UK bankruptsy proceedings free you from overwhelming debts so that you can make a fresh start.

If you have debt problems, you may be thinking about the possibility of bankruptcy. 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 because at the end of the bankruptcy period, most debts are cancelled.

What is bankruptsy?

Bankruptcy is a legal status that usually lasts for a year 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

How do you become bankrupt?

A court makes a bankruptcy order only after a bankruptcy petition has been presented. It is usually presented either:

• by yourself (debtor’s petition); or
• by one or more creditors who are owed at least £750 by you and that amount is unsecured (creditor’s petition).

A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditor’s claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order has been made
is both difficult and expensive.

Alternatives to bankruptsy

Bankruptcy is a serious matter - you'll have to give up possessions of value and the interest in your home. However, you don't have to become bankrupt just because you're in debt. You can try to make arrangements with your creditors instead - including:

• Informal Agreements - you write to your creditors and try to agree a repayment timetable.

• Individual Voluntary Arrangements (IVAs) – With an IVA an Insolvency Practitioner helps you negotiate repayment terms. An IVA can write off up to 60% of personal debts.

• Administration Orders - a county court orders you to make payments to the court, which the court then distributes amongst your creditors

Please note that bankruptsy is a last resort if you are in serious debt and have no other debt options. An IVA or Debt Management Plan are also options you should consider prior to going bankrupt.

Common Misspellings of bankruptcy:-

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

To contact a bankruptsy advisor call 0800 074 6918. Alternatively complete an online bankruptsy enquiry form and an advisor will call you back at the time that you specify.

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