Personal bankruptcies are a way for individuals to deal with debts they can’t afford. It’s a formal agreement between you and your creditors, and is designed to let you make a fresh start, free from debt, while ensuring your assets are shared among your creditors.

There is certainly some social stigma around declaring bankruptcy. However, debt solutions are designed to protect you when you most need the help. In most cases, any shame you may feel about the bankruptcy, feels a lot better than the constant stress and worry of being chased for outstanding debts.

It does clear HMRC debts, however, as with all creditors, they’ll try to get as much money back through selling off your assets before the remainder is cleared.

If the debtor files for bankruptcy, the debtor is responsible for paying for the bankruptcy, so they’ll need to have access to £680 in order to proceed. If one of your creditors files for your bankruptcy, they’ll pay for it themselves.

Bankruptcy is probably the most severe of the debt solutions available to you, mainly due to the requirements to sell off assets in order for your creditors to get as much of the money you owe. In that respect, it can look scary and losing some of your non-essential assets may require adjustment on your part, however, the ultimate objective is to get you debt-free and for that, adjustments are necessary.

If a creditor is petitioning for your bankruptcy and you owe less that £5000 in total, it’s highly likely not to be successful. That minimum debt thresh-hold doesn’t apply if you’re applying yourself. You may also be denied bankruptcy if the Official Receiver feels you’ve not been open and honest with your application.

{“type”:”elementor”,”siteurl”:”https://advicecentregroup.co.uk/wp-json/”,”elements”:[{“id”:”88d4b1c”,”elType”:”widget”,”isInner”:false,”isLocked”:false,”settings”:{“tabs”:[{“tab_title”:”What debts are wiped with bankruptcy?”,”tab_content”:”<p>Generally, unsecured debts are covered in your bankruptcy, debts such as credit cards, utility arrears, overdrafts, catalogue payments, store cards and overpayments of benefits. Debts generally not included are secured debts, fines and mortgages, as well as additional debts such as child maintenance arrears, student loans, court orders and TV licence arrears.</p>”,”_id”:”c30f845″},{“tab_title”:”How hard is it to recover from bankruptcies?”,”tab_content”:”<p>You’re right to be concerned about the recovery period after bankruptcies. Generally speaking, with a good recovery plan in place, the impact will be minimal. We’d advise you to monitor your credit report, avoid any further lines of expensive credit and follow a strict budget. 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center”,”_mask_position_tablet”:””,”_mask_position_mobile”:””,”_mask_position_x”:{“unit”:”%”,”size”:0,”sizes”:[]},”_mask_position_x_tablet”:{“unit”:”px”,”size”:””,”sizes”:[]},”_mask_position_x_mobile”:{“unit”:”px”,”size”:””,”sizes”:[]},”_mask_position_y”:{“unit”:”%”,”size”:0,”sizes”:[]},”_mask_position_y_tablet”:{“unit”:”px”,”size”:””,”sizes”:[]},”_mask_position_y_mobile”:{“unit”:”px”,”size”:””,”sizes”:[]},”_mask_repeat”:”no-repeat”,”_mask_repeat_tablet”:””,”_mask_repeat_mobile”:””,”hide_desktop”:””,”hide_tablet”:””,”hide_mobile”:””,”_attributes”:””,”custom_css”:””},”defaultEditSettings”:{“defaultEditRoute”:”content”},”elements”:[],”widgetType”:”toggle”,”editSettings”:{“defaultEditRoute”:”content”,”panel”:{“activeTab”:”content”,”activeSection”:”section_toggle”},”activeItemIndex”:1}}]}Yes, it’s perfectly possible, and it should be easier than your pre-bankruptcy spending habits. Be prepared to budget tightly, and follow practical advice for rebuilding your credit file.

Generally, unsecured debts are covered in your bankruptcy, debts such as credit cards, utility arrears, overdrafts, catalogue payments, store cards and overpayments of benefits. Debts generally not included are secured debts, fines and mortgages, as well as additional debts such as child maintenance arrears, student loans, court orders and TV licence arrears.

You’re right to be concerned about the recovery period after bankruptcies. Generally speaking, with a good recovery plan in place, the impact will be minimal. We’d advise you to monitor your credit report, avoid any further lines of expensive credit and follow a strict budget. Your credit file will take some years to recover, but with the right planning in place, you should have a clean file 6 years after the bankruptcy has ended.

It’s a case of different horses for different courses. They’re really designed for helping people at different stages of the debt process. So while there are some comparisons, such as being formal arrangements that are aimed at clearing your debt, they work in different ways. With an IVA, your assets are preserved and protected, whereas with a bankruptcy, they’re not.

Exiting bankruptcy does not immediately clear your credit file and once you’ve exited it, your debt commitments subsequent to the bankruptcy ending will define how quickly you can rebuild your credit. Unfortunately there’s no hard and fast rules and will depend entirely on your attitude to debt.

They are different things, unfortunately, so they can’t be compared. A CCJ can lead to a bankruptcy (if your creditors decide to attempt it) but it doesn’t work in reverse, a bankruptcy won’t lead to a CCJ. A CCJ is a judgement against you by the court and can lead to bailiffs visiting your home, whereas a bankruptcy is there to stop that happening (among other things). The only place where a CCJ and bankruptcy are comparable is the effect they have on your credit rating. They both remain on your credit file for six years. It’s also possible a CCJ will have a lesser impact on securing work if your industry is regulated.

It certainly can affect your current and future career path. Bankruptcies generally only affect regulated trades, such as security, legal or finance, but if you’re unsure, you should definitely check with your employer.

The process itself can be fairly stressful, you’ll have to evidence your incomings, outgoings, debts and assets and there may be a bit of back and forth while the admin is arranged. However stressful setting up a bankruptcy is, once you’re in it, you’ll stop being chased by creditors, and can look forward to a future free of debt, in time. That rather offsets the stress of filing for bankruptcy.