How To File Bankruptcy

How To File Bankruptcy:
What Is Bankruptcy and When Is It Appropriate?

Read About The Alternatives To Bankruptcy First

Go To Recommended UK Bankruptcy Advisers

Go To Recommended US Bankruptcy Advisers

Please Also See The Following Related Pages:

Bankruptcy Questions

Bankruptcy Rules and Law

Can Bankruptcy Stop Foreclosure/Repossession?

Administration Orders

Bankruptcy is understandably seen as a last resort. It is a formal procedure used to settle the affairs of people whose liabilities exceed their assets (you owe more than you own). You can either petition for bankruptcy yourself to seek protection from creditors, or a creditor owed more than £750 can ask the court to declare you bankrupt.

It is a way of wiping the slate clean, but there are many effects of bankruptcy that you need to be aware of and consider carefully before choosing to go down this route. First of all you must make sure you are aware of all the alternatives to bankruptcy and that this really is the best option.

The main alternatives, which should certainly be considered first, are Debt Settlement for US citizens and IVAs for UK citizens.

How To File Bankruptcy:
What is Bankruptcy?

The process of Bankruptcy is that once a petition is made (usually either by you or one of your creditors) the court will make a Bankruptcy Order against you. This can still happen even if you dispute or ignore the process. Your affairs will then be dealt with by the Official Receiver, who will appoint a bankruptcy trustee, who has to administer your financial affairs and arrange disposal of your assets to repay your creditors.

There are certain assets that you should be allowed to retain, including pension funds, things to need to carry out a trade, clothing, furniture, bedding, etc and a modest vehicle. First time personal bankruptcies should only last for 12 months before being discharged.

How To File Bankruptcy:
The Process Involved in Declaring Personal Bankruptcy

The process for declaring personal bankruptcy is fairly straightforward. You first need to obtain the relevant forms from the County Court for the part of the country you live in. These forms are the 'Debtor's Petition' and the 'Statement Of Affairs'. Alternatively you are able to fill these in online via the website of the Insolvency Service. Before you can present your petition, you are required to swear an oath, which can be done through a solicitor or Commissioner For Oaths. There is a court fee to be paid before the bankruptcy proceedings can commence. Sound like the last thing you need, but it is to cover the costs incurred by the court. This is usually around £500, but check with the court first.

Once you have your forms completed you go to the County Court to present your paperwork. It is best to get there first thing, which should give time to get everything sorted in one day. The judge will then assess your claim and and if you meet the criteria will approve you being declared bankrupt. That is the easy part over!

Then you move on to the Official Receiver, who will go through your affairs with you in much more detail. This will include how long the bankruptcy should last, what happens to your assets and whether you need to make payments to any of your creditors.

How To File Bankruptcy:
The Advantages of Declaring Personal Bankruptcy

When declaring personal bankruptcy you are immediately protected by the court from being chased by your creditors

Your bankruptcy trustee takes over all your financial affairs including dealing with creditors, making decisions and paying your debts

Once your bankruptcy is officially discharged, most of your debts are written off and creditors cannot pursue them, so you can make a clean start

Your creditors are forced to recognise that they must accept less money than that which is owed to them

How To File Bankruptcy:
Disadvantages of Declaring Personal Bankruptcy

There is an up front fee to apply for declaring personal bankruptcy and all costs of courts, trustees, etc have to be paid for out of your assets

You will lose any assets you have of value, including your home if you own it

Even if you rent your home, this could be at risk, particularly if your tenancy agreement prohibits undischarged bankrupts

If you own a business, this could be sold and employees dismissed

Bankruptcy Orders are announced in the local press where you live as well as the London Gazette and the Insolvency Service website

You may find it difficult to obtain a bank account until after discharge

You cannot transfer ownership or give away any assets at less than the market value

Even after discharge your assets might still be administered by the bankruptcy trustee

There are certain professions in which you will not be able to work, and you may have to disclose your bankruptcy in other job applications

Certain types of debt cannot be written off, so you may still have some debt after discharge

What To Do Next

If you think bankruptcy may be the best course of action, but are still not sure, the best thing to do is apply to a Debt Advisor, who will be able to either begin the bankruptcy process of advise you of any alternatives available to you.

You can do this quickly an easily by entering you basic details through an onine form. The company will then get back to you to gather further details and advise you of the alternatives open to you, and your best course of action.

Recommended UK Debt Advisors:
(See Below For US Advisors)

Bankruptcy UK - Top Debt Advisor:
SoveMyDebts

People considering possible bankruptcy in the UK should talk to SolveMyDebts before making any final decision. You can apply to them for help quickly and easily online, and they will get back to you to go through your situation in detail. They will then recommend what they think is the best solution to your problem, whether it is bankruptcy, an IVA or debt management.

To find out how they can help, just visit their website and fill in the simple 'urgent enquiry' form on the left of the page. Make sure you complete all fields on the form fully and accurately to prevent errors or delays. You can apply without any obligation to accept any proposal they make.

Recommended US Debt Advisors

Debt Consolidation Care (US Only)

This incredible company have already assisted over 150,000 people with serious debt problems. Getting help could not be easier - just complete the very simple online form and a debt counsellor will phone you back. They will go through your finances with you and advise you on what your best course of action is.

They offer a range of ways to pay off debt, so if the debt counsellor thinks there is a better alternative to bankruptcy, they will advise you of this.

Visit their website now to find out more.

CareOne Services (US Only)

Another of the most reputable and best established debt companies in the US, CareOne's track record is second to none, having already helped over 4.5 million people.

To get expert advice from CareOne Services just complete the very brief online form and they will contact you to go through your finances.

Advice on Declaring Personal Bankruptcy

How To File Bankruptcy:What Is Bankruptcy and When Is It Appropriate?