Personal Bankruptcy

• People with no assets (including those with no equity in their property)
• People living in either rented accommodation or with friends and family
• Those whose employment would not be lost or adversely affected by a Bankruptcy Order
• People who agree with the moral aspect of bankruptcy

It is a generally held misconception that personal bankruptcy is punitive and that bailiffs will seize your goods and chattels leaving you nothing but a change of clothes. This is false. You enter the protection of a Bankruptcy Order to do exactly that; to protect yourself from creditors and to allow you to wipe the slate clean and get a fresh start. Under Section 283(2) of the Insolvency Act you are allowed to keep the tools of your trade, all clothing, bedding, furniture and even your car (provided it’s not too expensive and subject to certain conditions) the general principle is that your goods and chattels are safe.

The law changed in 2004 and the mandatory period required to serve under the Bankruptcy Order was reduced from 3 years to 1 year even if you have been adjudged bankrupt before. Bankruptcy is no longer a punitive action and is there to allow discharged Bankrupts the opportunity of rebuilding their lives. In some cases, bankrupts can be discharged from bankruptcy in as little as 3 months at the Official Receiver’s discretion. An early discharge is possible provided no creditors object. For those granted an early discharge, the average discharge period is around 7 months.

Bankruptcy Information UK has assisted many individuals who have visited the site looking for a debt solution and someone to assist them with clear information and speedy and direct assistance. We hope that you are able to find what you are looking for and always welcome your comments on how we may improve our services. Money Advice Service provides a gateway to UK bankruptcy information and all types of commercial insolvency matters.

Your Choices

1. Do Nothing
   This is usually an option if you feel that your circumstances may well change for the better fairly soon and you don't want to enter into an arrangement that may be costly, if only to hold your creditors back for a limited period of time. This is only an option if you are confident that your circumstances are going to change for the better. If you do nothing and you have no exit strategy then you may leave yourself exposed and your situation may well get worse. It is better to be pro-active than re-active. It is always better to deal with a problem rather than ignore it, as it will only get worse.


2. Consider Bankruptcy
   Often bankruptcy is the fastest and cheapest way out of debt. Bankruptcy should be considered if you have no assets to protect, live in rented accommodation or a mortgaged property in negative equity, and are in employment that will not be affected by Bankruptcy. Please contact one of our consultants if you are in the Armed Forces or work in the Police Force or Emergency Services and we will explain your options.


3. Consider an (IVA) Individual Voluntary Arrangement
   IVAs were originally designed to provide relief to debts generated as a result of business insolvency. In recent years, increasing levels of consumer debt has led to many insolvent individuals with non-business debt seeking the legal protection offered within an IVA. IVAs are usually appropriate where you have assets to protect or your employment or moral beliefs regarding your debt situation make bankruptcy an unsuitable option. It may be that you have special reasons for not wanting to enter into bankruptcy in which case an IVA is a suitable debt solution to consider. Please contact us now to discuss with one of our advisors.


4. Consider a Debt Management Programme (DMP)
   You may like the idea of a Debt Management Company handling your creditors for you. Once your circumstances are known an affordable monthly payment will be agreed whereby you pay this affordable amount to the debt management company who will then write to all of your creditors and request that interest be frozen and distribute a proportionate amount to each of your creditors. You have access by telephone to your Debt Management Company and do not have to wait to see someone. All this can be arranged in one phone call. There is a high level of anonymity of a telephone service run by a Debt management company. This relieves you from having to contact your creditors directly as the Debt Management company liaise with your creditors through the Debt Management Plan. Debt management is quickly becoming popular for property/home owners as there are not the restrictions against the property that there are in IVA’s. It is much more flexible.

Bankruptcy from Abroad

Wherever you are now living in the world, an agent from Money Advice Service can assist you in declaring yourself bankrupt, without returning home. Wherever you are located in the world, the Bankruptcy Information UK website can help you.