Bankruptcy is a court order that an individual can apply for or can be applied for them by a creditor. It is a government handled insolvency process where an Official Receiver will take control of the bankrupt’s estate and deal with creditors.
This process will only last for a maximum of 1 year where at the end, the money you owe is usually written off.
Top Bankruptcy Facts
- It can cost around £700 to enter into Bankruptcy
- If you own any property such as a family home this tends to be sold to help with payments to creditors
- Sometimes Bankruptcy cases can pass to a private practice Insolvency Practitioner to handle rather than the Official Receiver
- Bankruptcy will stay on your credit rating for 6 years
The Bankruptcy Process Explained
Advantages & Disadvantages of Bankruptcy
- Pressure is taken off the individual
- Only lasts 1 year
- No legal action can be taken against the individual
- The money owed is usually written off
- Can cost around £700 to file for Bankruptcy
- You cannot apply for credit while in Bankruptcy
- Your home may be taken away and sold for funds for creditors
- It will stay on your credit rating for 6 years
- It can stop you from applying for certain job opportunities i.e. director
What is the outcome of Bankruptcy?
At the end of Bankruptcy most debts will have been paid or written off; some debts that this will not apply to include any form of student loans.
What is the cost of Bankruptcy?
For an individual entering themselves into Bankruptcy it can cost around £700.