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Dan Reardon

I am a Debt Counsellor, licensed by the Financial Conduct Authority

Bankruptcy

If you want to apply for Bankruptcy, you can do so here:

https://www.gov.uk/apply-for-bankruptcy

If you have questions about whether this is the most appropriate solution for you, please get in touch with me via the contact me section.

Below is a summary of what I cover in the video:

Bankruptcy Process:

  1. To file for voluntary bankruptcy, an individual must apply to the court through an online application and pay a fee of £680.
  2. Once the bankruptcy application is approved, the court appoints an Official Receiver (OR) to oversee the process. The OR is a government official responsible for managing the bankruptcy proceedings.
  3. The OR evaluates the debtor’s assets, including property, vehicles, and personal belongings, to determine if any can be sold to repay creditors. The debtor is also required to provide details of their debts, income, and expenses.
  4. Once bankruptcy is declared, an automatic stay comes into effect, which prohibits creditors from taking further legal action or pursuing debt collection efforts against the debtor.
  5. If the debtor has a disposable income after covering their reasonable living expenses, the OR will implement an Income Payments Order (IPO). The IPO requires the debtor to make monthly payments for a specified period, usually three years, to repay creditors.
  6. Debt discharge: In most cases, the debtor is discharged from bankruptcy after one year. However, the debtor’s assets may still be sold to repay creditors after this period.

Consequences of entering Bankruptcy:

  1. Bankruptcy remains on your credit file for six years, which will make it extremely challenging to obtain credit during that period and will affect your ability to secure loans or mortgages.
  2. The details of your Bankruptcy will be recorded on the Insolvency Register, which is accessible by the public and credit agencies.
  3. During the Bankruptcy period, there are restrictions on borrowing more than £500.
  4. You cannot establish, promote, or manage a company without court permission, or act as a company director without court permission.
  5. Tenancy restrictions – check your tenancy agreement before entering Bankruptcy as some will state that entering Bankruptcy will result in eviction.
  6. Hire Purchase – check any HP agreements before entering Bankruptcy as some will demand return of the vehicle/goods upon doing so.
  7. Employment implications – certain professions and roles, such as those in finance or law, may have restrictions or implications related to entering Bankruptcy.