Debt Help UK

If you're struggling with your finances and serious debt then you probably want to ask some bankruptcy questions, just in case the worst happens. Here are the answers to a selection of the most common bankruptcy questions.

1. Who can make me bankrupt?

You can be made bankrupt by any Creditors who you owe £750 or more to. However, it is likely you'd have to owe significantly more for a bankruptcy to be enforced.

You can also make yourself bankrupt which is known as a voluntary bankruptcy. To do this you need what is known as a 'Debtor's Petition'.

2. Will bankruptcy cost me anything?

In short, yes. The expenses you can expect to pay are as folllows:

£120 in court fees for the time you take up getting your bankruptcy processed. This fee is sometimes waived depending on your individual circumstances.

£250 in further administration fees which is payable as a deposit.

3. How do I declare myself bankrupt?

In order to declare yourself bankrupt you need to fill in various forms as well as contacting your local court. For the full procedure on declaring bankruptcy, visit our dedicated section. 

4. What's next after a bankruptcy?

First off, you can't use any of your existing bank or building sociert accounts, in the event that they haven't already been closed.

You're also not allowed to borrow more than £250 from any provider without first telling them that you have been made bankrupt.

You may also have to attend court to explain how you became bankrupt. This might sound embarrassing and it often is, so prepare yourself in advance.

It goes without saying but you no longer have to make repayments to your creditors, so anyone who contacts you regarding money owed should be informed of your bankrupt status.

All of your financial details need to be handed over to the Official Receiver so that they can be reviewed to see what financial assets you have and what can/should be done with them.

5. What can't I do whilst bankrupt?

You can't:

Obtain credit worth more than £250 without disclosing your bankrupt status.

Start your own business without permission from the courts.

Take on management or other high profile roles within a company.

Work for the council or public offices in some roles.

Open a new bank account without first telling the providers you are bankrupt.

6. Will bankruptcy destroy my credit rating?

You'll be financially black listed for a minimum of six years. After this time your bankruptcy will be wiped from your credit record.

However, even after this period you might still be asked directly if you've been bankrupt in the past and you're obligated by law to tell the truth.

7. How long does a bankruptcy last?

The good news about bankruptcy (if there is any) is that you can be discharged quicker than ever nowadays after new government legislation was implemented. 

If you're lucky you'll be discharged from bankruptcy in just over a year but might still have to fulfil certain duties attached to your procedure.

If it isn't your first time being made bankrupt then you won't be eligible for automatic discharge and will have to wait up to five years to apply for it.

8. What are the alternatives to bankruptcy? 

The obvious alternative to a bankruptcy is an IVA. This is basically where you make repayments on a small percentage of your debt and have the rest wiped away. We've got more information on the IVA so be sure to check out our dedicated page.