What is bankruptcy?
Bankruptcy is a debt solution which, along with debt management and IVA, should be considered as part of the best advice process when dealing with an individual who is unable to repay their unsecured debts due to money problems.
Bankruptcy is a formal court procedure for which you can apply, or which can be started by one of your creditors where £750.00 or more is owed. Bankruptcy will typically end after one year, following which you will be free of debt.
If you are considering bankruptcy, you should seek expert impartial advice. In bankruptcy your assets (possessions of value) and income are dealt with by the Official Receiver.
Beware: you cannot include the following debts in bankruptcy
- Secured debts
- CSA payments
- Court fines
- Overpayment of benefits
- Student Loans
The definition of bankruptcy
Law A debtor that, upon voluntary petition or one invoked by the debtor’s creditors, is judged legally insolvent. The debtor’s remaining property is then administered for the creditors or is distributed among them.
