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. Bankruptcy shouldn't taken lightly as it's a big step and any assets you own (such as your car or home) may be sold. Bankruptcy will also be registered on your credit history for six years and could affect your job. In some cases, you are asked to make monthly payments towards your debts from your available income. This is known as an income payment agreement (IPA), and can last for three years. You should always get expert advice before making the decision to go ahead with it. The easiest way to find out whether bankruptcy is your best option is to use our free online debt advice tool.
Bankruptcy fees vary depending on where you live in the UK. In England and Wales you pay a total of £680, made up of a £130 fee to the adjudicator and £550 to the official receiver. a total of £680. In Northern Ireland the total cost is £669 made up of a £137 court fee, £525 bankruptcy deposit and solicitor's fees of £7.
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.
Joint bankruptcy is only available to business partners. If you're a couple, and bankruptcy is the most suitable solution to deal with your debt, you'd each need to apply individually for your bankruptcy as well as pay separate bankruptcy fees.