Bankruptcy

What is Bankruptcy?

Bankruptcy is normally a process undertaken by an individual or creditor once all other avenues have been exhausted or an individual is not responding to attempts to rectify the situation. A court can declare you bankrupt by issuing a 'bankruptcy order' after it has been presented with a 'bankruptcy petition'. Your creditors can present a creditor's petition if you owe them an unsecured debt of over £750.

Once bankruptcy proceedings have started, you must co-operate fully - even if you have received a creditor's petition and you do not agree with their claim. Whenever possible you should try to reach a settlement before the petition is due to be heard in court, as trying later can be difficult and expensive.

Once a client has been declared bankrupt it becomes incredibly difficult to obtain further forms of credit. Normally contract phones are disconnected, as are things like Sky or cable with some people not allowed to pay utilities by direct debit so they then have to have meters fitted in their houses. Most clients find that their bank accounts become frozen. Alternative solutions like Debt Management, IVAs or Trust Deeds will prevent this type of thing happening.

Bankruptcy is a very serious matter - you will have to give up possessions of value and the interest in your home. However, you do not have to become bankrupt just because you are in debt. You may qualify for an Individual Voluntary Arrangement (IVA) or Debt Management Plan. It most certainly is not an easy way out of a situation and does come with a large stigma attached to it.

You will normally have to pay court costs of around £500 before you can consider this route. However Bankruptcy laws have been relaxed recently which has made the overall process slightly simpler.

Debt Support Service offers a lot of debt solutions and will make sure the debt advice given to you is correct, depending on your individual circumstances.

Call us free on 0800 008 7969 to speak with one of our expert advisors about your debts and the options that may be available to you.

Alternatively, complete the online enquiry form and one of our advisors will call you back.