Bankruptcy Advice

Personal bankruptcy enables individuals in severe financial distress to clear debts and ultimately make a fresh start. This is primarily achieved by selling assets, which may include your home if you have equity in it. Declaring yourself bankrupt has a significant impact on your life, so you shouldn’t enter into the process before obtaining expert UK bankruptcy advice.

Fortunately, you can rely on Irwin Insolvency to help you decide if bankruptcy is right for you. As licensed insolvency practitioners, we’re qualified to manage personal bankruptcies and therefore ideally placed to assess your financial position and explain what you stand to lose/gain with personal bankruptcy. Another benefit of our bankruptcy advice is you’ll find out if bankruptcy alternatives such as individual voluntary arrangements (repayment plans that normally let people keep their homes, etc.) would be more suitable.

Simply call Irwin Insolvency today on 0800 254 5122 for your free, no-obligation initial consultation.

How Bankruptcy Works – The Process

After receiving bankruptcy advice and deciding to pursue personal bankruptcy, you seek a bankruptcy order from the Insolvency Service. This involves completing a bankruptcy application online, supported by details about your finances, and paying £680.

If the adjudicator agrees you can’t fulfil your financial obligations and issues the order, the official receiver will request further information (e.g. a list of valuables) and may interview you about what led to bankruptcy. Either the official receiver or an insolvency practitioner will, as the trustee, sell your non-essential assets and divide funds between creditors. Any surplus income may also go towards settling debts.

Personal bankruptcies usually last for 12 months. Outstanding debt is then cancelled.

Bankruptcy Eligibility Criteria

To be eligible for personal bankruptcy, you must be insolvent (i.e. unable to pay debts on time). Plus, you need to have explored/exhausted bankruptcy alternatives.

Personal bankruptcies cover most debts, including overdrafts, payday loans, utility bills and credit card debt. They exclude non-provable debts, such as child maintenance, court fines, student loans and TV licence arrears.

Bankruptcy Advantages

• Personal bankruptcies get people’s finances back on track
• Bankruptcy advice is readily available
• Personal bankruptcy covers a wide range of debts
• No contact/legal action from creditors
• Keep essential assets, e.g. clothing and furniture
• Become debt-free in 12 months

Bankruptcy Disadvantages

• Personal bankruptcies are recorded in The Gazette and Individual Insolvency Register, plus they appear on credit reports for 6 years
• Bank/building society accounts may be closed
• You can’t borrow over £500 without disclosing you’re bankrupt
• Your home, car and business may be sold
• May affect your ability to work, especially if you handle money or hold public office

Personal Bankruptcy FAQs

What is personal bankruptcy?

Personal bankruptcy is a legal process that enables an insolvent individual to ‘reset’ their financial affairs in 12 months. You give up assets and any surplus income to clear as much debt as possible; the rest will be written-off. So although bankruptcy is painful, it wipes the slate clean.

Can I declare myself bankrupt?

Yes – although some personal bankruptcies are instigated by creditors, you can declare yourself bankrupt instead if overburdened with debt. But please note you won’t be officially bankrupt until the Insolvency Service issues a bankruptcy order.

What does declaring bankruptcy do?

Declaring bankruptcy relieves creditor pressure and sets you on the road to a debt-free future. Your personal bankruptcy trustee uses your assets and spare money to settle debts, but you aren’t forced to repay everything you owe. Personal bankruptcies let people start afresh after a period of hardship.

How to declare myself bankrupt – what should I do?

First, obtain sound bankruptcy advice (from an insolvency practitioner, for example). When you’re certain personal bankruptcy is your best debt solution, gather together financial documents (e.g. bank statements, wage slips, bills). Then visit the government’s website to apply for bankruptcy.

How to apply for bankruptcy – what’s involved?

Applying for personal bankruptcy involves sharing accurate, detailed financial information with the Insolvency Service. The adjudicator will accept or, if they decide you’re not actually insolvent, reject your application within 28 days.

Where can I get help with bankruptcy fees?

Before your personal bankruptcy application can be processed, you need to pay the £130 adjudicator’s fee and £550 official receiver’s fee (£680 in total).

The charity Turn2us offers financial help for some personal bankruptcies. Alternatively, someone you trust might agree to pay. Or you can pay in instalments if you can’t afford to pay £680 outright.

UK Bankruptcy Advice from Insolvency Experts

Declaring yourself bankrupt is a life-changing step and may not be your only option. That’s why guidance from our experienced, sympathetic insolvency practitioners can be an invaluable investment.

Contact Irwin Insolvency today for expert bankruptcy advice and make the right decision about your financial future.