Your lenders may file a Bankruptcy petition (Creditor’s Petition) if you owe them more than £750.
However, in order for you to declare yourself bankrupt you must firstly fill in a Bankruptcy Petition (Debtor’s Petition).
Once the petition has been filed, a court date will be set for an initial hearing. This first hearing will decide whether or not a Bankruptcy Order should be made.
If a Bankruptcy Order is made, you will be declared bankrupt.
A Bankruptcy Order can still be made even if you refuse to acknowledge or agree to the order. Therefore you should try to co-operate fully once the Bankruptcy proceedings have begun. If you dispute the lender(s) claims you should try and reach a settlement with them before the Bankruptcy Order is made, as trying to do so afterwards is difficult and expensive.
How much will it cost?
If you go bankrupt you may have to pay the following:
The Court Fee of £180 (if you receive means-tested benefits you may be exempt or be able to pay a reduced fee).
The Official Receiver Fee or Deposit of £525
If you are a couple and are both applying for Bankruptcy, you will each have to pay separate fees.
Faith Financial Solutions do not administer bankruptcies, however, we are able to give you free guidance and identify if there may be a better option.
You can also get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt.
Are there other options to bankruptcy?
Bankruptcy is probably one of the most well-known forms of debt help because it is often talked about in the press, which is why many people assume it’s the only way to get out of debt.
For some people, Bankruptcy is the right option, but it is one of the most severe options available so you should always find out if your debt problems could be resolved with a solution such as a Debt Management Plan, IVA, Protected Trust Deed, or Debt Relief Order.
What will happen to my assets in bankruptcy?
You can keep any tools, books, vehicles (if low value) and other items of equipment needed personally in your employment or business. You will also be able to keep your clothing, bedding, household furniture, basic household items and certain pension entitlements.
You will lose control of larger assets, such as your home, as these will be sold to raise money to repay your creditors.
What will I have to do if I go bankrupt?
When you go bankrupt, you must provide information about your financial affairs – handing over control of your assets, bank statements and insurance policies to the Official Receiver.
You may have to attend court to explain why you’re in debt.
You are not allowed to make any direct payments to your lenders.
Any bank, building society accounts, credit cards or similar must no longer be used.