Bankruptcy is a formal insolvency procedure that may have long-lasting effects on an individual and should not be considered without serious thought.
Bankruptcy may be considered where existing debts far outweigh your existing income and assets with little prospect of paying it back within a reasonable timescale. After Bankruptcy your debts will be written off, however being Bankrupt may negatively affect your long term financial plans. You may lose control of valuable assets, and be required to make contributions from your income for up to three years.
In order for a bankruptcy petition to be served against you, three conditions must be met. The debt must be a minimum of £5,000 (this limit was revised as of October 2015). You must have been a permanent resident of the UK within the last three years, for a period of six months or more and have little or no realistic ability to repay your debts after failing to satisfy a statutory demand from a creditor.
By an IVA Supervisor application
From April 2016 you can petition for bankruptcy online. You will need to submit details of your current financial circumstances inclusive of income, expenditure and debts. Your application will then be reviewed by an adjudicator who decides if you should be made bankrupt or not.
If you are considering doing this yourself we strongly advise getting professional legal and financial advice beforehand.
Should a bankruptcy Order be issued the Official Receiver will review your liabilities, assets and contact your creditors.
In the event the application is rejected you have 14 days to request a review.
If the adjudicator upholds the original decision then you have 28 days to appeal the decision to the court. The court will then either grant or deny an order.
Within 12 months from the date of your bankruptcy, on the assumption you have met all your legal obligations, you should be discharged. You can however be subject to an Income Payment Agreement for up to three years. This requires you to make monthly payments towards those debts, from any disposable income, after your essential bills have been met.
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Finance Lead Tech Limited T/A Assist My Finances are an Appointed Representative of Sterling Green LTD who are authorised under the Financial Conduct Authority under registration number 808320. Finance Lead Tech Limited T/A Assist My Finances do not directly provide solutions. We offer no obligation referrals to trusted providers of appropriate solutions and receive a fee from these providers if you choose to proceed with the solution. Free and Impartial advice, debt counselling, debt adjustment and credit information services are available from the Money Advice Service and you can find out more by contacting them. The solutions on this page are not available if you reside in Scotland.