Bankruptcy
Advice Debt specialise in the administration of Individual Voluntary Arrangements (IVAs). Should you not meet the criteria for an IVA, we will refer you to one of our trusted third parties for further advice.
Bankruptcy is often a last-ditch effort for those faced with the harsh reality of unmanageable debt, but it can be a powerful means to wipe the slate clean and start fresh financially.
What is Bankruptcy?
Bankruptcy is a formal insolvency process which results in all of your qualifying debts being written off; you may be suitable for this if you cannot afford to repay your debts as and when they fall due.
You can make an application yourself online, or your creditors can apply to make you bankrupt; however, you would need to owe at least £5000 for the creditor to do this. It is important you receive advice before considering this option.
How long does Bankruptcy last?
Bankruptcy usually last for 12 months which is referred to the moratorium period. During this period, you may have some restrictions placed against you. Bankruptcy can be extended in certain circumstances where you have a restriction order – this is usually if you have been dishonest during your application. Bankruptcy will be recorded on your credit profile for 6 years from the date it is registered.
Advantages and Disadvantages of Bankruptcy
There are several key points that should be taken into account before making the decision. Be sure to do your research properly in order to fully understand what this option entails so you can make an informed choice.
Advantages
- You are legally protected meaning creditors can no longer pursue you.
- Interest and Charges are frozen.
- Debts are typically written off after 12-months (unless you’re subject to a Bankruptcy Restrictions Order).
Disadvantages
- Assets of value may be sold to repay your debts (including your home – if you’re a homeowner).
- There is an application fee of £680, however this can be paid in instalments.
- You could be subject to an Income Payments Order for 3 years (Benefit only applicants will never be subject to this).
- Your details will be listed on the insolvency register which is a public record.
- Will have a negative impact on your credit profile for 6 years.
What is the actual cost of bankruptcy?
The fees in Bankruptcy are as follows.
The total cost is £680 which is split in to two.
- £130 – adjudicator fee
- £550 deposit (fully refunded if the petition is rejected)
The bankruptcy fee must be paid in full before you can petition for bankruptcy. You can pay in full or pay in instalments via the government site.
You will not be required to make any further payments towards the debts involved in your bankruptcy, however, you must keep up the payments to your household expenditure items such as your Rent / Mortgage, Council Tax and Utility Bills.
Why choose Advice Debt?
We can help you.
We all know how difficult it can be when facing financial difficulties. That’s why we are here for you. Our advisers will listen to your concerns and can provide information on the debt solutions available. We specialise in individual voluntary arrangements and you can find more about them on our website.
Advice Debt Top Tips
Committed to providing debt information & solutions
Start with our 3 quick and easy steps
Step 1
Complete our Online Form
Private & Confidential
Our form is user-friendly and is easy to complete.
The first step always feels like the hardest, but you’ve come to the right place.
Step 2
Talk to the Experts
Help without judgement
Tell us about your situation, and we’ll tell you exactly what help you’re entitled to.
We’ll inform you about what solutions you qualify for, and answer any questions you may have along the way.
Step 3
Take Action today
No obligation service
We know that debt is daunting, but after speaking with us, we can put together a personal action plan to put your mind at ease.
We’ll help set things up and support you in dealing with your debts, for however long is needed.
Let's get started
- Safe, secure and confidential.
Our team of experts help thousands of families every year across the UK get their finances back on track.
Prefer to speak later?
We will offer guidance, support and a solution at a time that suits you.
*To find out more about managing your money and getting free advice, visit Money Helper, an independent service set up to help people manage their money.
