Debt Help - Debt Management GuideDebt Management Articles - Bankruptcy
If there is no way that you can get out of debt you should consider filing for bankruptcy. If you do file for bankruptcy after 3 years all your debts are written off, but if you file your own petition and your debts are less than £20,000 your debts will be written off after 2 years.
Bankruptcy forms are available from local country court offices. It costs a £250 deposit and £140 court fees (exempt if you are in certain benefits or on low income) payable in cash when you submit your form to the court. Often on the same day of filing you will have a hearing in front of the district judge who will decide if the order is appropriate.
If the order goes through you will be referred to an Official Receiver who will go through a long questionnaire with you (sometimes this is done over telephone).
Sometimes creditors can make you bankrupt if you owe them more than £750, although this rarely happens.
When you are bankrupt some items you have may be sold. Clothes, bedding, furniture, household equipment for basic domestic needs, and things that are necessary for your employment, e.g. books, tools and vehicles will not be sold. Items that may be sold include antiques, expensive electrical equipment and valuable cars that are not needed for employment.
Your property is likely to be sold, although it is possible to get someone to buy your beneficial interest it can be saved from being sold. There are many complex things that happen in different circumstances, you should seek advice before going bankrupt on what will happen to your property.
If you earn more than average and you will have spare money after paying bills and buying essentials you may have to pay a part of your wages.
If you have a business it will usually be closed down, but not always, but if it isn’t it will be hard to get credit over £250 for your business or your own personal finances.
If you have paid off your debts you can be discharged from bankruptcy.
There are alternatives to bankruptcy such as IVAs that you should look into before going bankrupt.
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