Filing for Bankruptcy

Bankruptcy should be considered as a last resort

This section will provide information for those considering filing bankruptcy. Please note that If you want to declare yourself bankrupt you have to start the process by filing a Bankruptcy Petition.

If you file for bankruptcy yourself, the bankruptcy petition is called the Debtor's Petition. Please note that filing a bankruptcy petition does not prevent your creditors from contacting or taking other civil legal action against you.

What is filing bankruptcy?

Filing bankruptcy is a legal status that usually lasts for a year and can be a way of clearing debts you can't pay. When you're bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off the people you owe money to. At the end of the bankruptcy period, most debts are cancelled.

How do you go about filing bankruptcy?

A court can declare you bankrupt by issuing a 'bankruptcy order' after it's been presented with a 'bankruptcy petition'.

Filing your own bankruptcy petition

A form (a debtor's petition) can be downloaded from the Insolvency Service website or obtained from county courts with bankruptcy jurisdiction.

How filing bankruptcy affects you assets

Once you're bankrupt, the Official Receiver, or appointed trustee, can sell your assets to pay your creditors. However, certain goods aren't treated as assets for this purpose, for example:

• Equipment you need for your work (eg, tools or vehicles)
• Household items needed by you and your family (eg, clothing, bedding and furniture)
• Earnings

14 Important questions on declaring bankruptcy.

1. What is filing bankruptcy?
2. The process if filing bankruptcy.
3. The effects of filing bankruptcy
4. The disadvantages of filing bankruptcy
5. What happens after filing bankruptcy?
6. What are the alternatives to filing bankruptcy?
7. What happens when you visit the Official Receiver's Office after filing bankruptcy?
8. What happens to my home after filing bankruptcy?
9. What happens to my pension after filing bankruptcy?
10. What effect will filing Bankruptcy have on your credit rating?
11. Debts you have incurred after you have been declared bankrupt
12. What are the advantages of filingBankruptcy?
13. What are the disadvantages of filing Bankruptcy?
14. What are the implications of filing Bankruptcy?

If you would like any further information and advice about filing bankruptcy in the UK and the possible alternatives of declaring bankruptcy, please contact Money Advice Direct bankruptcy team on 0800 074 6918. The service can advise on all aspects of bankruptcy law including the Disadvantages of Bankruptcy, How to File for Bankruptcy, How to Avoid Bankruptcy and the Effects of Bankruptcy.

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