Bankruptcy
(England, Wales & Northern
Ireland only)
Becoming bankrupt can help people in debt rid themselves of debt that would otherwise take many years to clear. Bankruptcy is a form of insolvency, where your unsecured debts outweigh your assets. If you make yourself bankrupt, your creditors write off your unsecured debts. This allows you to have a fresh start. Becoming bankrupt is a very difficult decision and it should not be entered into lightly. Bankruptcy may not be the best option; there may be other alternatives if you have assets such as a house, a car or you are in a certain type of employment.
A court appoints a trustee or Official Receiver to take over the management of your financial affairs for a limited period of time. You should expect to pay around £700 to be able to declare yourself bankrupt. This includes a £525 deposit for the Official Receivers and is designed to cover the cost of administering your bankruptcy. This fee must be paid and is unavoidable. A further fee of £175 is payable for court fees. In some cases, it is possible to have this fee waived or reduced.
Debt Relief Order
(England, Wales & Northern Ireland only)
A Debt Relief Order (DRO) is an order granted by the Insolvency Service in cases where you can’t afford to pay off debts. With a debt relief order, none of the companies to which you owe money (your creditors) can take action against you to get their money back. This lasts for as long as you have the DRO, which is usually about a year. At the end of this time, all the debts included in your order are written off.
To apply for a debt relief order, you must have debts of less than £15,000 and a low income. You will not be able to apply for a DRO if you own assets or have savings of over £300.
Contact Debt Advisory Service
For more information on Bankruptcy and Debt Relief Orders, please contact us for debt advice today on 08000 191 278, Email us at enquiries@debtadvisoryservice.co.uk or simply fill out our Debt Advice Enquiry Form.
