Bancrupsy

Bancrupsy as an option to clear large debts

If you have no money left over in your budget, or you have so little that it will take many years for you to re-pay your debts, you may want to look at Bancrupsy as an option.

Going bankrupt can take the pressure of creditors away from you. You are allowed to keep certain things, like household goods and a reasonable amount to live on. When the Bancrupsy order is over, you can make a fresh start and the money you owe is usually written off. In many cases, this can be after only one year. Creditors have to stop most types of court action to get their money back following a bankruptcy order.

Who can go bankrupt?

Anyone can go bankrupt. You can either have a petition made against you for bankruptcy or you can apply to declare yourself bankrupt. Before deciding whether to go bankrupt or not, make sure you have considered the alternatives. Bankruptcy may not be your only option.

Bankruptcy is only one way of dealing with your debts. The advantage of bankruptcy is that you can make a fresh start with your finances, however you need to be aware of the implications of going bankrupt and the cost to yourself.

Disadvantages Of Bancrupsy

• It will cost you money (up to £500) to go bankrupt
• If you own your own home, it will usually have to be sold
• Some of your possessions might have to be sold, for example, you will usually lose your car and any luxury items you own
• If you own a business, it is more than likely that your business will be closed down and your employees sacked
• You can't keep your bankruptcy private. A list of bankrupt people is published on the internet and your case could also be published in your local newspaper
• Even when you are no longer bankrupt, you could have another order, called a Bancrupsy restrictions order made against you. These orders can be made if, for example, you took on debts knowing that you had no hope of paying them back. A bankruptcy restrictions order can last for 15 years and will make your financial affairs very restricted
• Even when you are no longer bankrupt, there are some debts such as court fines and student loans that will never be written off.

Common Bankruptcy Questions

• What happens to my home in bankruptcy?
• What happens to my pension in bankruptcy?
• When will my bankruptcy end?
• How am I made Bankrupt?
• Where is the Bankruptcy Order made?
• Who will deal with my bankruptcy?
• Who do I need to tell if I go bankrupt?
• What are your duties as a bankrupt?
• What effect will Bankruptcy have on your credit rating?

Alternatives to Bancrupsy

IVA – individual Voluntary Arrangement

If you have enough money left over after paying your priority creditors and essential expenses, you may be able to arrange an Individual Voluntary Arrangement (IVA).

An IVA is a legal agreement with creditors (usually non priority creditors) to repay your debts. This could either be in part or in full. The arrangement is negotiated, written up and checked regularly by an independent solicitor or accountant called an Insolvency Practitioner. Not all the creditors have to agree to an IVA as long as the creditors to whom you owe 75% of your debt agree.

Informal Arrangements

You may be able to come to an “informal” arrangement with your creditors to repay what you owe. It can be difficult to get everyone to agree to such an arrangement.

Debt Management Plans

There are several agencies that will act on your behalf to negotiate reduced payments with your creditors.

Administration Order

If you owe less than £5,000 in total to two or more different creditors and have at least one County Court judgment against you then this Court monitored arrangement could be a good option. You will need to obtain Form N92 from your local County Court Office.

Common Misspellings of bankruptcy:-

• Bankrupty
• Bancraptcy
• Bancrupsty
• Bankrupcy
• Bancrupsy
• Bakruptcy
• Bankrupsy
• Bancruptcy
• Bakrupcy
• Bancrupcy
• Bancruptsy
• Bakruptsy
• Bankruptsy

Please note that bancrupsy is a last resort if you are in serious debt and have no other debt options. An IVA or Debt Management Plan can save you from going bankrupt.

To contact a bancrupsy advisor call 0800 074 6918. Alternatively complete an online  bancrupsy enquiry form and an advisor will call you back at the time that you specify.

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