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Bankruptcy may write off eligible debts on discharge.

May not be suitable in all circumstances. Fees apply. Your credit rating may be affectedMay not be suitable in all circumstances. Fees apply. Your credit rating may be affected

What is Bankruptcy?

Bankruptcy is a way of legally declaring your inability to pay your creditors. It is a formal debt solution for those who have an amount of debt which they cannot repay. In Bankruptcy you usually stop paying your creditors. Your creditors cannot chase you for the outstanding debt. It can provide a real fresh start for debts that will never be repaid.

May not be suitable in all circumstances. Fees apply. Your credit rating may be affected

Some of the things the lenders will have to abide by are the following:

  • You can be discharged after 12 months
  • Upon discharge 100% of eligible debts are written off
  • Bankruptcy stops any legal action now
  • It costs £680 to apply for bankruptcy in England and Wales. If you can't afford that, a charity may be able to help.

Pros & Cons of Bankruptcy

Pros

  • You will no longer have to deal with your creditors.
  • Once your bankruptcy is completed you will be able to start again financially, without any debt.
  • You no longer have to make payments towards your creditors. (If you have available disposable income you will have to contribute this under an Income Payment Order for 3 years.)

Cons

  • Your credit rating is likely to be severely affected.
  • You cannot acquire credit of £500 or more without disclosing you are bankrupt.
  • You cannot be a director of a limited company.
  • You may lose your home and car.
  • Some employers will not allow you to enter bankruptcy and in doing so you could lose your job. You should check your contract of employment first.
  • If you receive income for employment, a private pension or any other form of income which is not state benefits then you may be asked to make payments to your bankruptcy for 3 years.
  • It costs £680 to apply for bankruptcy in England and Wales. If you can't afford that, a charity may be able to help. find out more here - click here

How does Bankruptcy work?

Get started today

Contact an authorised debt advice provider to discuss bankruptcy. Numo does not arrange bankruptcy applications.

A confidential conversation

You can find free, impartial debt advice through MoneyHelper at www.moneyhelper.org.uk.

May not be suitable in all circumstances. Fees apply. Your credit rating may be affected

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May not be suitable in all circumstances. Fees apply. Your credit rating may be affected

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May not be suitable in all circumstances. Fees apply. Your credit rating may be affected

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