If you have no money to pay your creditors or have so little that it will take many years to repay them, bankruptcy might be the best option for you. There is no minimum amount of debt required to go bankrupt. If the value of your unsecured debt is greater than the value of the belongings you own, such as property or motor vehicles, it may be an option for you. Unsecured debts include credit cards, personal loans, store cards and funds owing to HM Revenue & Customs. If you don’t have a large amount of debt, there may be other options that are better for you.
As well as applying for bankruptcy yourself, a creditor you owe money to can also apply to make you bankrupt. However, such a creditor (or creditors) must be owed at least £5,000.
If you are a partner in a partnership that cannot be salvaged, you can declare yourself Bankrupt. The partnership is automatically dissolved and any remaining partners can carry on the business with a view to concluding its affairs.
Bankruptcy can offer a fresh start, as all unsecured debts are usually written off in the bankruptcy and creditors are not able to take any further action against you. You may also be allowed to keep certain belongings such as household goods and enough money to live on during the bankruptcy period (usually 12 months). However, bankruptcy may have a serious impact on your day-to-day life. There are certain rules called restrictions during the bankruptcy period which you must adhere to. A breach of these restrictions can be a criminal offence.
As a bankrupt individual, you will have a duty to assist the Trustee in Bankruptcy during his enquiries into your financial conduct before the bankruptcy. As licensed Insolvency Practitioners, we can be appointed as Trustee, and will act in the very best interests of all parties.
A Trustee has three years from the date of the Bankruptcy Order to realise any interest in the property in which you reside, known as a matrimonial home. If you have any surplus income each month, you could be liable to make payments for a period of three years, known as an income payments agreement, or an income payments order where the matter is dealt with by the court.
Through a free, confidential consultation at your convenience, we can quickly ascertain whether bankruptcy is the right option for you given your personal circumstances. If we think that bankruptcy is your best option, our specialist personal insolvency team will support you every step of the way.