Bankruptcy in the UK: A Complete Guide
What Is Bankruptcy?
Bankruptcy is a legal process for individuals who are unable to repay their debts. It allows debts to be written off, but comes with serious consequences, including loss of assets and restrictions on financial activities.
Who Can Apply for Bankruptcy?
You can apply for bankruptcy in England, Wales, or Northern Ireland if:
- You cannot repay your debts and owe more than your assets.
- You live in, or have business connections to, the UK.
- You owe at least £5,000 (for creditor-initiated bankruptcy).
How to Declare Bankruptcy in the UK
- Apply Online – In England and Wales, submit an application via the Insolvency Service.
- Pay the Fee – The application costs £680.
- Decision by an Official Adjudicator – The Insolvency Service will decide within 28 days whether to approve your bankruptcy.
- Bankruptcy Restrictions Apply – If approved, your financial situation will be managed by an Official Receiver.
What Happens After Bankruptcy?
✅ Debts Are Written Off – Most debts are cancelled after 12 months.
✅ Assets May Be Sold – Your home, car, and valuables may be used to repay creditors.
✅ Credit Rating Is Affected – Bankruptcy stays on your record for six years.
✅ Restrictions Apply – You cannot apply for credit over £500 without disclosing bankruptcy.
Alternatives to Bankruptcy
- Debt Relief Order (DRO) – For debts under £30,000 (England & Wales).
- Individual Voluntary Arrangement (IVA) – A formal repayment plan with creditors.
- Debt Management Plan (DMP) – An informal agreement to repay debts over time.
How Fraser Bond Can Help
At Fraser Bond, we provide expert advice on:
- Managing property and financial assets during bankruptcy.
- Exploring alternatives to bankruptcy to protect your assets.
- Navigating the property market post-bankruptcy.
Conclusion
Bankruptcy is a serious financial decision but can provide a fresh start for those struggling with unmanageable debt. Before applying, it’s important to consider all options and seek professional advice.
For expert guidance on property and finance during bankruptcy, contact Fraser Bond today!
