Bankruptcy is a legal process that can write off unsecured debts and allow you to make a fresh start in life. If you are looking for bankruptcy information, here are some facts.
You can only declare yourself bankrupt if you're insolvent. This means that your unsecured debts must outweigh your assets (including property and vehicles).
The term of personal bankruptcy is usually 12 months.
Any money left over after paying your household bills and essential living expenses, has to be paid to the Official Receiver for 3 years. This money is paid back to the people you owe money to.
While you are bankrupt you cannot borrow over £500 without declaring your circumstances to the creditor. You cannot promote, form or manage a limited company without the permission of the court. Nor can you trade in any business under any other name unless you inform all persons concerned with the bankruptcy. You also cannot become a school governor.
Your credit file will also be severely affected and it is unlikely that you will be able to use credit for several years.
In order to file for bankruptcy, you must pay a total fee of £700 (£175 to the court and £525 to the Official Receiver).
Once you're declared bankrupt, creditors must stop charging interest and cannot contact you or take legal action to recover the debt.
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