Advantages of Bankruptcy

  • A ‘light at the end of the tunnel’ – a date when you know you’ll have repaid your debts
  • Peace of mind
  • Protection from creditors
  • No further liability to your creditors
  • A chance to make a new start

Disadvantages of Bankruptcy

  • Your credit rating will be negatively affected for six years after your bankruptcy.
  • Personal bankruptcy will be placed on a public Insolvency Register.
  • Your home is likely to be sold unless you have little or no equity in the property.
  • Cars over the value of £3,000 are usually sold, however, if a friend or relative pays the difference then it’s possible to keep it.
  • You’ll be left with few or no assets of value.
  • Some jobs are affected by bankruptcy, for example, you won’t be able to work as a company director or be involved with the management of a limited company while you’re bankrupt. You can also no longer practice as a solicitor, accountant or in other financial services.
  • It comes with a cost – you will need to pay £680 to go bankrupt.
How does bankruptcy work?
You can apply for bankruptcy by filing a petition at the County Court – the district judge will decide whether or not to grant the bankruptcy.
This is a voluntary bankruptcy, however, there is also an involuntary bankruptcy which means any of your creditors can petition for your bankruptcy if you owe them £5000 or more. The team at Michael Alan can assist you in applying for your bankruptcy petition if you decide that it’s the right solution for you.
Step 1
Complete the online bankruptcy application form and pay the fee
Step 2
An official receiver will talk to you about your finances & assets take control of your bankruptcy
Step 3
You will be discharged from the bankruptcy order after 12 months

Is bankruptcy right for me?

While it should be considered very carefully and as a last resort, bankruptcy is the best way out of debt for some people. It all depends on your situation – bankruptcy might be right for you, if you:

  • have a limited disposable income,
  • don’t think your financial situation will improve in the short to medium term
  • can’t repay your debt within a realistic timeframe
  • own few assets, and
  • have already considered other debt solutions

There are some things to consider before deciding to go bankrupt:

  • Any valuable assets, including your home, may be sold so the funds can go towards repaying your creditors
  • You will not be able to work in some professions e.g. as a company director or local government councillor
  • Your bankruptcy will be advertised in newspapers
  • Bankruptcy is a formal, court-driven process
  • Bankruptcy will affect your credit rating for 6 years

Please note that MA Finance do not charge any fees what so ever for the advice of bankruptcy and debt relief order applications.