We could help you reduce
your debt with bankruptcy advice

When you are declared bankrupt, the process usually involves your possessions being shared amongst those to whom you owe money. This can include items such as your house, car and jewellery amongst other valuable items other than essentials. This is one of the areas where we frequently provide bankruptcy advice, as those who do declare bankruptcy aren’t sure what possessions can be taken as repayments. Your income will also be taken into account, and you may find that you are also asked to make payments towards your debt for a maximum of three years. 

Although the bankruptcy process can seem like an intense one, once you have been declared bankrupt, then you will no longer have the pressure of dealing with creditors. This step alone can help many individuals look to get their finances back on track. 

Any lenders will need to stop court action that is in the process of or is being taken against you and perhaps the most relieving fact is that after one year you will usually be “discharged” from your debts. When you come to Fresh Start UK for bankruptcy advice, we can talk you through the steps that will be taken should you decide to declare bankruptcy.

Declaring bankruptcy is an extreme financial measure and one which should not be taken lightly. There are many ways that bankruptcy can affect different areas of your life, both before, during and after submitting your application. This is why we recommend seeking bankruptcy advice before finalising your application, as there may be alternatives that are better suited.

You could lose valuable possessions

To pay off your creditors, you may have to sell or lose some valuable possessions. You will be able to keep basic items that you need for living and working, which could include your car if you cannot work without it. You might need to trade in the possessions you keep for cheaper alternatives. It can be upsetting to lose your valuable possessions, but the steps taken will help you towards a debt-free life. 

Your bankruptcy will be made public knowledge

When you are declared bankrupt, then your bankruptcy will be made publicly accessible. Although your bankruptcy will be published online, your details would have to be searched for specifically, so it may be unlikely for anyone you know to stumble across it.  Additionally, bankruptcy details are not made known to newspapers or local outlets.

You may have your bank accounts closed

Having your bank accounts closed after bankruptcy can make your day-to-day life difficult, especially since they are used for everything from receiving your work salary and paying your utilities and bills. Following bankruptcy, you may be able to open a basic bank account, but this might not offer you the same benefits as the one you were using previously. They are designed for people who have a bad credit history, and simply allow you to store and pay money without being able to access credit cards or overdraft accounts. 

You may lose your passport

If you are in a severe financial situation, then you may have your passport taken away from you. This is known as being impounded, however, it is unlikely to happen to you unless the courts believe that you may head abroad to sell your possessions. 

Your bankruptcy may affect your spouse 

If you are financially linked to someone, such as a spouse or partner, then your declaration of bankruptcy could have a negative impact on how lenders also view them. Examples of a financial link include a joint account or shared mortgage, but if you aren’t linked to them in this way, then their credit information or score shouldn’t be affected, even if the two of you do live together. 

If you both own joint property or have shared possessions then these could be sold when you declare bankruptcy to help pay your creditors. Your partner will often be given the option to buy your share or agree upon a value for them. If the item ends up being sold, then the money will be shared with your partner and creditors. In the instance that your spouse or partner is closely linked with you financially, then they are also eligible for bankruptcy advice to find out more about how this could affect them.

To declare bankruptcy, you have to pay a total fee of £680. This can be paid online when you apply or be split up into instalments, but the total fee must be paid before your application is completed. There are ways in which you can pay in cash at certain banks, but if you choose this option, then you cannot split the payment into instalments and you need to pay it all at once. 

If you have someone who has offered to cover and pay the fee for you, then they can pay online when you make your bankruptcy application. If you are unsure of the best way to pay the bankruptcy fees and need advice for bankruptcy, then we can help – please get in touch with our team today. You may be eligible for grants, which you don’t need to pay back, which you can search for on the Turn2us site.

The bankruptcy advice that we give often relates to people asking where their bankruptcy will be published. Unless there is a compelling reason or high level of public concern, then your bankruptcy won’t be published in a newspaper or on other news sources, but it will be published on 2 government websites. 

These websites, the Insolvency Register and The Gazette, list people who have declared bankruptcy and will usually list your name and address, but you can request for your address to be kept confidential. Your details are published as they are classed as being a public record, In the Insolvency Register, they will remain for 15 months, but will stay in The Gazette indefinitely.

Bankruptcy will affect your credit score for as long as it remains on your credit records, which is anytime up to 10 years, but the negative impact it has will reduce over time. There is no set figure by how much your credit score will be impacted by a declared bankruptcy, as your credit profile is unique to you and is rated on a number of factors. 

You can expect that, when you declare bankruptcy, your credit score will decrease, as this indicates that you are no longer able to pay money back as per your original agreement. You will also find that you have trouble applying for credit in the future, when your bankruptcy has been discharged. 

Although your credit score will be impacted for a number of years, there are ways in which you can rebuild your credit score and, with the impact that bankruptcy has on your credit reducing over the years, practising good credit habits can add positive changes back to your credit score. If you are particularly worried about your credit score following bankruptcy, contact us for debt advice and assistance. Bankruptcy isn’t the end of your financial power or management, it just requires some further work and commitment to rebuild your credit score.

Yes, a creditor has the power to make you bankrupt if you over over £5,000 to them and you have not been able to repay that debt. Creditors can also group together to declare you bankrupt, but this is a very rare occurrence. If you have had an individual voluntary arrangement (IVA) which has failed, then this can also lead to you being made bankrupt. 

Before submitting an application to make you bankrupt, creditors will need to send you a statutory demand first. This is a formal demand for debts of at least £5,000 and requires you to pay the demanded amount, offer to secure the debt against a property that you own or offer to pay the debt back in a way which the creditor needs to agree to. 

You can apply to get a statutory demand ‘put aside’ in certain circumstances. If the debt you owe is less than £5,000, for example, or if there is a significant dispute between you and the creditor about the money which is owed. If a creditor applies to make you bankrupt, then we can provide you with bankruptcy advice about your next steps. 

If a creditor is applying to make you bankrupt, then you will be asked to attend a hearing. It is recommended that you attend the hearing, particularly if you want to stop the bankruptcy application from being finalised. Should you wish to defend against bankruptcy, then our bankruptcy advice can provide you with guidance on what to do in this situation.

Bankruptcy is an unavoidable financial situation for some, but it is not a decision which should be taken lightly. Before you apply for bankruptcy, it is important to explore all other options which might be available for you, which is where our bankruptcy advice can come in handy. 

Evaluate your situation: To get a better understanding of your situation, take a closer look at your financial situation and debts. It might be that some simple budgeting decisions are all that’s needed to make you better manage your finances. You can also look at considering other opportunities to increase your cash flow, such as a second job. 

Consider other debt repayment methods: Should you find that, after evaluating your debts, you have some alternative options to help you manage your debts, then these may be better suited for you rather than looking to declare bankruptcy. We can help you create a debt management plan (DMP) and look at any other available options. 

Talk to your lender: Some lenders may be able to help and be willing to provide you with some relief from your debts in the form of a reduced interest rate or alternative monthly payment options, especially if you tell them that you are considering declaring bankruptcy. If you are looking to take this method, then we can help you with bankruptcy advice and arranging details to provide your lenders with.