If your debts are really high and you cannot pay them back, you should consider filing for bankruptcy.
In England and Wales, bankruptcy is regulated by the Insolvency Act 1986. In Scotland, the bankruptcy procedure is
completely different, and so is the bankruptcy filing with AiB (Accountant in Bankruptcy). On this page we will only
discuss the bankruptcy procedure in England and Wales.
How does the consumer bankruptcy procedure work?
You are freed from overwhelming debts. Thanks to this, you have the opportunity to make a fresh start.
Anyone working full-time, self-employed or working in a partnership can become bankrupt.
But if you are a director or secretary of a ltd company, you are not allowed to apply for a bankruptcy
Advantages of going bankrupt:
– You will get rid of almost all your debts
– Your creditors will not be able to claim their debts
– You will be able to keep your household appliances
– You will be able to keep your vehicle if it is not worth more than £2000
– You will be able to continue to practice your profession, unless it is a consultancy or financial trading
Disadvantages of going bankrupt:
You have obligations and limitations for 1 year from the date you receive your bankruptcy order (this is called
– You are not allowed to take out new loans without the consent of the official receiver
– You are not allowed to use credit cards
– You are not allowed to be a director of a ltd company
– You can own a vehicle up to a value of £2000
– Your bank account may be closed (but you can open a new account with another bank)
– You must inform the trustee of any financial surplus beyond what is used for normal living expenses (yours
and your family’s)
– You must notify the trustee of any change of address
– If your earnings are higher than the expenses necessary for living, the trustee may apply an income payment
All the above restrictions are cancelled after the restriction period, i.e. after 1 year from the date of your
Debts which bankruptcy covers:
– Bank loans
– Bounce Back Loans
– Credit cards
– Council tax
– Utility bills
– Private debts
– Rent arrears
Debts which bankruptcy NOT covers:
– Child maintenance
– Student loans
– Criminal court fines
– Personal Compensation
– Fraudulent state benefits
In order to obtain a bankruptcy ordert, an application must be made and submitted to the court. The court fee is
Our company provides full services in the conduct of bankruptcy in England and Wales.
Please feel free to contact us:
Landline: 0208 123 2576 Mobile: 0787 482 4634