Learn about Bankruptcy

What is Bankruptcy?

Bankruptcy is an option if you are completely unable to pay back your debts and a court appoints a trustee or Official Receiver to take over the management of your financial affairs for a limited period of time.

The Official Receiver will be entitled to sell your assets - such as your house and possessions - in order to raise the money needed to pay off your creditors.

When is Bankruptcy an option?

You can opt to declare yourself Bankrupt voluntarily if you know your debts are unmanageable and there's nothing else you can do, or you could be forced into Bankruptcy if your creditors petition the court because you weren't paying what you owe them.

Bankruptcy generally lasts for 1 year, but remains on your credit file for 6 years, during which time your ability to obtain credit will be hindered. It will generally become easier to get credit towards the end of the 6 years and onwards.

Whilst you may be discharged from bankruptcy within a year, if you are asked to make contributions from your income these are likely to continue for a further 2 years (3 years in total).

How can Bankruptcy effect your future?

Bankruptcy has some other serious effects on your future, so it's best to get all the information you can and see if there's anything you can do to avoid it.

Read about the advantages and disadvantages of Bankruptcy to find out if it's the right solution for you, or to see if we can offer something better.

What should you do about your debt?

When dealing with debt you should seek professional advice after you get an accurate online indication. There are various debt solutions available to consider before you think about declaring yourself bankrupt that may have a far less severe impact on your future.