Going Bankrupt

This page is dedicated to some of the common questions you may have before going bankrupt.

Although you will be surprised at how easy it is to declare yourself bankrupt, please do not be fooled by its simplicity. Bankruptcy can be very complex and unforgiving. Make sure that you seek professional help.

If you are unsure about bankruptcy or require any help going through it then please feel free to get in touch.

How to go bankrupt

To go bankrupt you need to:

• Get as much information on bankruptcy as possible
• Get advice
• Complete the required forms (petition and statement of affairs) (see the forms page)
• File the forms at court and pay the fees

The two most important steps above are information and advice. Having the knowledge of bankruptcy will help remove uncertainty and taking advice will make sure that you are fully aware of the consequences.

Who can go bankrupt and what are the costs?

A common misconception is that companies go bankrupt. That is not true. In the UK bankruptcy only applies to individuals. Any individual can go bankrupt but you will need to meet the grounds for being able to petition. Luckily there is only one, which is you are unable to repay your debts. You must owe more than £750.

If you are married and you both intend on going bankrupt then you will need to present two separate petitions and pay separate fees. See filing bankruptcy for more information on the costs.

What restrictions will apply once I go bankrupt?

From the date of the bankruptcy order you will be subject to bankruptcy restrictions which mean you cannot:

• Get £500 or more of credit either alone or jointly with any other person without informing the lender of your bankruptcy
• Carry on business (directly or indirectly) in a different name from that in which you were made bankrupt, without telling all those with whom you do business the name in which you were made bankrupt
• Be concerned (directly or indirectly) in promoting, forming or managing a limited company, or acting as a company director, without the court's permission, whether formally appointed as a director or not

It is an offence to breach the bankruptcy restrictions.

These restrictions are most likely to affect you if you run a business or intend on running a business after bankruptcy.

It is important to remember that when you go bankrupt there will be an investigation into your affairs. If you meet the grounds for a bankruptcy restrictions order then these restrictions will be prolonged for a period of two to fifteen years. See the bankruptcy restrictions undertaking page for more information.

What should you do before going bankrupt?

• Make sure that you understand the consequences and have received advice. Advice is by far the most important step in going bankrupt as it can save you pain and suffering both now and later.
• Establish which court in England or Wales you should be going to. It will help you to make an appointment in advance.
• Make sure you have completed the forms correctly, have them checked and the consequences of submitting the forms to court explained. Make sure you disclose everything that you are required to.
• Think about the impact of going bankrupt on your bank account, remember you will still have bills to pay.
• Establish whether your family is likely to be affected.
• You should most certainly seek advice in regard to your home and other shared assets.

The list goes on, please remember that information and advice is key.

Where can I get help with going bankrupt?

Always go to someone that specialises in bankruptcy and has experience with alternatives to bankruptcy also. You need to make sure that bankruptcy is definitely your best option. You also need to make sure that you are fully informed of how bankruptcy will affect you now and in the future. Please feel free to use my helpline.