How Does Bankruptcy Work?

We have helped thousands of clients who thought that Bankruptcy was the only way to escape from mounting levels of debt.

Bankruptcy is a legal procedure for those with serious debt problems and cannot keep up on monthly repayments. It should be seen as only a very last resort, as there are many other solutions avaliable. For more information, please call our expert advisors on freephone 0808 131 9100.

A bankruptcy order will:

• Free you from escalating debt, allowing you a fresh start (subject to restrictions).
• Ensure that your assets are equally shared out among your creditors.

Recent legislation changes mean that the average Bankruptcy period usually lasts 12 months, as opposed to the previous 36 months, making it seem a much more attractive choice.

However, there are still many serious consequences, so bankruptcy should only ever be considered as a last resort. It requires that the debtor to surrender any assets in order to pay off their exisitng debts. After the end of the bankruptcy period, a debtor gets a clear financial plate, as most debts are written off.

An individual can be declared bankrupt either voluntarily through an application to their local County Court, or involuntarily through an application issued by one of your creditors, which can happen when they are owed as little as £750.

A bankruptcy order can go ahead even if you refuse to agree to the proceedings. If you dispute the creditor’s claim, you should try and come to a settlement before the bankruptcy petition is due to be heard in court. Trying to do so afterwards becomes very difficult and expensive.


Free Bankruptcy Advice:

We are always on hand (via a free phone number, 0808 131 9100) if you are having problems managing your debts and are looking for some helpful advice. Alternatively, fill in our online Enquiry Form and we will get back to you as soon as possible.

Entering into an IVA may adversely affect your credit rating for up to six years from the date of approval.

Your property will be protected within an IVA but you may be required to release all or part of any equity during the period of the arrangement.

Failure to complete the term of an IVA can result in bankruptcy.

(In Scotland, a PTD is the equivalent to an IVA.)