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?
When you go bankrupt almost all of your debts are written off, allowing you to make a fresh start. However declaring yourself bankrupt is a big step that involves fees and can impact many areas of your life, such as your job or home.
In the UK, personal bankruptcy normally lasts for a year. During this time you can’t borrow more than £500 without letting the creditor know you’re bankrupt. You must also declare any changes in your circumstances to the official receiver. You could be asked to sell valuable assets such as your home or car, but you’ll be 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 you pay a £130 fee to the adjudicator and £550 to the official receiver, a total of £680. For more details of varying UK charges see bankruptcy fees.