Bankruptcy Explained

Bankruptcy

Bankruptcy is a legal status that usually lasts for a year (see 'How long does bankruptcy last' below) and can be a way of clearing debts you can't pay. When you're bankrupt, your non-essential assets (property and possessions) and excess income are used to pay off your creditors (those you owe money to). At the end of the bankruptcy period, most debts are 'discharged' (cancelled). A court can declare you bankrupt by issuing a 'bankruptcy order' after it's been presented with a 'bankruptcy petition'. Filing your own bankruptcy petition A form (a debtor's petition) can be downloaded from the Insolvency Service website or obtained from county courts with bankruptcy jurisdiction. When completed the form should be taken to the county court nearest to you that has bankruptcy jurisdiction. A fee of £150 is payable, although this can be waived if you meet specific criteria, when you file the petition. A deposit of £360, for the Official Receiver's work, is also payable at this time. This amount cannot be waived.