subject: Declaring Yourself Bankrupt [print this page] We investigate what it means to declare yourself bankruptin the UK and how you can start the filing for bankruptcy process.
If you have personal debts which you are unable to pay, you can solve the problem by declaring yourself bankrupt, sometimes known as filing for bankruptcy.
Once you are bankrupt all of your unsecured debts are taken away from you.
The official receiver will review your financial situation and if you can afford to pay something towards your debt you will be asked to do so for up to three years but rarely for any longer.
If you are a homeowner, your property may be at risk after declaring yourself bankrupt if there is equity in it. However if there is no equity or the property is in negative equity it is likely that you will be able to keep it.
How you are declared bankrupt
It is possible for one of the people you owe money to, to file for your bankruptcy and make you bankrupt by force. However this is unlikely to happen unless you owe money to HM Revenue and Customs.
The majority of people who go bankrupt in the UK actually declare themselves bankrupt because it is the best debt solution for them.
Once you have made the decision, declaring yourself bankrupt is actually relatively simple. The process involves completing an application form and then taking it in person to your local county court. If your form is in order you will normally be made bankrupt on the day.
You cannot file bankruptcy on line. You will have to download your bankruptcy application forms from the internet. You must then complete them and then take them to your local UK county court yourself.
Cost of filing for bankruptcy
As will as taking your application to the court you will have to pay a fee to declare yourself bankrupt which you have to pay in cash to the court on the day.
The cost of bankruptcy in the UK is currently 700. This is made up of a court fee of 175 and a bankruptcy deposit of 525.
Everyone has to pay a fee although if you are on a low income or claiming certain benefits you may not have to pay the court fee thus reducing the cost to 525.
If you are declaring yourself bankrupt getting this money together is often a problem. Many people borrow the money from friends or family but if you are unable to do this you could draw cash from a credit card or even take a payday loan to fund the bankruptcy. This debt is then included in your bankruptcy.
Help with declaring yourself bankrupt
You should not decide to declare yourself bankrupt without first taking bankruptcy help from an expert debt advisor.
Filing for bankruptcy could well be the best solution to resolve your personal debt problem. However unless you properly understood the implications, bankruptcy can have serious consequences particularly if you are a home owner as your house could be at risk.
As a homeowner, you must always get specialist bankruptcy advice before declaring yourself bankrupt.
Getting bankruptcy advice will also mean that you complete your bankruptcy application forms correctly. Not doing this could mean that you are asked to make a monthly payment towards your debt that you cannot afford.
The right debt solution
Bankruptcy can often be seen as a solution which is only to be used as a last resort.
However when trying to decide how to deal with your debt problem you should always consider bankruptcy.
For many people it is actually the best solution enabling them to draw a line under their debts once and for all and move on.
Filling for bankruptcy should never be taken lightly but it should also not be automatically discounted as a sensible way of resolving a personal debt problem.
