Filing for Bankruptcy:

Bankruptcy can seem like a very quick and easy process with debts being discharged in a year, especially to those with no assets to lose. For people with assets or who have a high level job it could make life difficult. Read further for guidance.

Bankruptcy is a relatively quick process to write off debts (12 months) but can have long term effects on your bank, job and personal affairs.

Bankruptcy is usually suited to those with low income jobs or people who don’t have a secure job that will ensure sustained commitment to their monthly debt payments and have little or no assets.

There is no set minimum amount of debt people need to have.

Bankruptcy is not a free service. As of this website set up, costs were approximately £310 to the administrators of the bankruptcy and £140 for court costs. You must check current costs if this is a solution you wish to pursue. 

Once filed, the debtor has no control over their assets as they can be sold to pay back creditors. Once bankrupt you will not have to deal with creditors because the official receiver will do so for you.

Non essential assets may be sold off and the proceeds shared between your creditors. A car may well be seen as a non essential asset or a luxury, however if owning a car is vital to your job then you will most likely get to keep it. Owning a house may also be deemed as a non essential asset or luxury as you may well have equity built up in your property which could be shared with by your creditors, if you have dependents extra time may be given to you to sell your property and find alternative accommodation.

Bankrupts may have current and future employment difficulties in the finance, legal, police or armed force sectors. If you are a director of a company you will be asked to step down. Bankruptcy can also cause problems with the rental of property as individuals may find it difficult to obtain suitable rented accommodation if credit checks are required.

Debts are usually discharged after a year, meaning debts will be erased and you can start afresh. Bankruptcy will still be on record for 6 years after filing which could make it difficult for you to obtain further credit until the record is cleared which isn't a bad thing.