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i This solution is only available in England, Wales and Northern Ireland.

What is bankruptcy

Voluntary bankruptcy

Entering into voluntary bankruptcy is known as a ‘debtor’s petition’. This means applying to make yourself bankrupt, as opposed to being made bankrupt by someone else.

Bankruptcy is a type of debt solution suited to people with debts they can’t pay back in a reasonable time. If you decide to go bankrupt, assets you own such as your car or house 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.

Applying for bankruptcy is referred to as ‘petitioning for bankruptcy’. To enter into bankruptcy voluntarily, you submit bankruptcy forms online and pay a fee.

Can someone else make me bankrupt?

You can also be made bankrupt by one or more of your creditors, who can start bankruptcy proceedings against you to try to get back the money you owe them.

To do this they would usually issue you with a document called a 'statutory demand'. This is a written warning that lets you know your creditor will start bankruptcy proceedings if you don’t pay your debt or come to an agreement with them. It should usually be delivered to you in person.

A creditor can start bankruptcy proceedings 21 days after they've issued you with a statutory demand. If your creditors have issued one of these, get in touch with us straight away for some help as it’s better to deal with this as soon as possible.

A creditor can make you bankrupt without sending a statutory demand in the following cases:

  • You had an individual voluntary arrangement (IVA) which failed
  • The creditor has tried to use bailiffs or enforcement agents to collect a debt, but they’ve found you don’t own anything of value

If your creditor makes your bankrupt the process is very much the same as if you petition for it yourself however your creditors will have to pay the court fees for you.

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Bankruptcy advice from StepChange Debt Charity

If you’re worried about your level of debt and are considering bankruptcy, get some free, professional advice first. We can help you decide if bankruptcy is right for you or recommend a more appropriate debt solution for your circumstances. Try our online debt advice tool for advice tailored to your needs.

Helping you become debt free...

“I wish to thank your staff for all the great help they gave me when I was in so much debt.
They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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