Steps to follow

• Do you have debts which you are totally unable to repay?
• You can declare yourself bankrupt which is a means of clearing debts you can’t pay.
• If you owe more than £750 to one creditor which you don’t repay despite repeated requests, that creditor can ask that you be declared bankrupt.
• To be declared bankrupt, you (or your creditor) must present a court with a bankruptcy petition.
• A completed petition form (available from Insolvency Service website) should be submitted to your nearest county court with bankruptcy jurisdiction together with a £150 fee and a £360 deposit.
• If, at your bankruptcy hearing, the court agrees to issue a bankruptcy order, the court will take over responsibility for repaying your debts. Most of your property and possessions will be sold to pay your creditors.
• The court may also issue an income payment order which means any spare money you have will be paid into the court for the next three years towards your debts.
• The court will appoint an Official Receiver who will administer your bankruptcy and look into your financial affairs for the time leading up to your bankruptcy. You must provide all the information the OR requires.
• During the bankruptcy period, you’re protected from further action against you by creditors.
• At the end of the bankruptcy period - usually lasts a year – most debts are discharged.
• Three years after your bankruptcy order you need to pay the court and administration fees associated with your bankruptcy.

What to watch out for

Various restrictions are placed on a bankrupt: you must not obtain credit over £500 without telling the creditor you're bankrupt; you can’t conduct business in any name other than that in which you were made bankrupt; you can’t serve in the police or military; or work as a company director, lawyer, magistrate, accountant or MP.

Solicitor’s top tip

If your assets are worth more than £2000 and your unsecured debts less than £20,000 the court might make an individual voluntary arrangement (IVA) or an administration order which do not impose the same restrictions as bankruptcy. With an IVA, and insolvency practitioner is appointed by the court who will sell off your assets to pay off your creditors. An administration order protects you from action from creditors while you make regular payments into court.

Useful links

Free advice

Bankruptcy UK
Consumer Debt Service
Insolvency Service
Direct Gov. Bankruptcy
Advice Guide
Piggy Bankrupt
Citizens Advice Bureau
National Debtline

Online services

Debt Help UK
Bankruptcy Services
ACS Bankruptcy
Free From Debt

Useful articles

Is bankruptcy right for you?
Overview of bankruptcy
Bankruptcy Basics
Recovering debts from other people/companies
Missing mortgage payments