Bankruptcy is a formal insolvency act which is usually a last resort if you cannot pay back your debts. Any assets you own is usually sold to raise funds to pay back your creditors. Any remaining money left over after your monthly budget could also go to your creditors each month for a period of up to three years.
Bankruptcy applies to people living in England, Wales and Northern Ireland. If you reside in Scotland then Sequestration is the equivalent which could be right for you. You can apply for Bankruptcy yourself or if your creditors decide, they can petition to make you bankrupt.
There is usually a fee payable of £680 to go down the Bankruptcy route. If you own a home then you could be asked to surrender the house to raise funds towards the Bankruptcy. Your creditors cannot contact you whilst you’re Bankrupt. You may need to consider if Bankruptcy is the right option for you as it could have a detrimental effect to your job.
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