Is bankruptcy suitable for me?
Bankruptcy (like an IVA) is a form of insolvency and is normally only suitable if you can’t pay back your debts in a reasonable time. Assets you own, such as your house or car, will usually be sold to pay off your debts. This means if your assets are worth more than your debts, or if all of your regular payments are up to date and you can afford to keep paying them, bankruptcy is unlikely to be the best option for you.
Bankruptcy works differently if you live in Scotland. Read our page on bankruptcy in Scotland for more information.
How does bankruptcy work?
If you make yourself bankrupt your creditors write off your unsecured debts. This allows you to make a fresh start. In the UK, personal bankruptcy normally lasts for a year. You can’t borrow any further money during this period and have to declare any changes in your circumstances to the official receiver. You may be asked to sell valuable assets but you’re able to keep the things you need for day-to-day living.
How much are bankruptcy fees?
Bankruptcy fees vary throughout the UK. In England and Wales bankruptcy fees total £705. You pay a £180 fee to the court and £525 to the official receiver. If you have a low income or receive benefits you may be exempt from the court fee, allowing you to go bankrupt for £525. For more details of varying UK charges see bankruptcy fees.