This is not an option to be taken lightly but if your debts are over £20,000 this might be the best way to get your finances back under control.
If you have debts of less than £20,000 you could apply for a Debt Relief Order more details on this can be found here.
Most debts that you have when a bankruptcy order is made will be covered by your bankruptcy. This means they will automatically be written off at the end of the bankruptcy period.
Bankruptcy won't stop your mortgage lender from taking steps to repossess your home if you're behind on your mortgage. However, if your home is repossessed and sold, but doesn't raise enough money to pay off your outstanding mortgage or any other debt secured on it, the remaining debt will no longer be secured. This means you will be released from it at the end of your bankruptcy. You will also be released from it even if your home is sold at any time after your bankruptcy has ended.
If you took out any of your debts by fraud, your creditor cannot chase you to pay while you are in bankruptcy, but they will not be written off at the end of the bankruptcy period. This means you will still be liable for paying debts you obtained by fraud after you have been discharged from bankruptcy.
If you owe debts jointly with someone else, you can include these in your bankruptcy. However, the creditor would then be able to chase the other person for the whole amount owed. They can do this whether the person is working or not.
You and the other person can each apply for bankruptcy individually, which would cover the joint debt. You will each need to pay a fee and a deposit separately. You cannot jointly apply for bankruptcy.
If you have business debts that were taken out in a partnership, you can make a joint application for bankruptcy as long as all the partners agree. If you are thinking about doing this, you should take specialist advice.
Your bankruptcy will normally end after a year. The Official Receiver will tell you when it is over. Most debts that have not been paid will be written off although some debts like court fines and student loans can never be written off.
Even when you’re no longer bankrupt, you could have a bankruptcy restriction order made against you. This can last up to 15 years and will restrict your financial affairs. This order could be made if, for example, you do not co-operate with the Official Receiver, or you take on debts knowing that you won’t be able to pay them back.
You can apply to go bankrupt online by filling in a form at www.gov.uk/apply-for-bankruptcy.
It will cost £680 and you can either pay:
If you make false statements on the form, or don’t tell the truth about all of your property, it is a criminal offence and you could be fined or sent to prison.
Insolvency Service enquiry line
Telephone: 0300 678 0015
Open Monday to Friday, 8am to 5pm
We can help you decide which option is best for you so please contact us if you are unsure.