When you’re thinking about becoming bankrupt you first need to work out if it’s the right solution for you.
Bankruptcy does give you a fresh start and frees you from the debts that got out of control, but it’s not without consequences and some of these consequences can be far-reaching. In total, your bankruptcy will affect in in some way for at least six years, so visit here to make sure you’re doing the right thing. If you do decide to go ahead, this is how it all works.
You complete the form and pay your fee
You’ll find the form at GOV.uk and the fee is £680 if you’re in England or Wales (£669 in Northern Ireland). You can pay in installments if you pay online, which is better for most people.
You withdraw enough money for a month’s living expenses
The official receiver has up to 28 days to decide whether to accept or reject your application, but your bank accounts may be frozen as soon as your application is in. You need to draw out enough money to pay your way for at least a month – groceries, bills, transport and so on.
You submit the form
Once you’ve completed the form, you confirm that you’re the person detailed on it and that the information you’ve given is accurate and true. You must also agree to a credit check. If you falsify or omit any information about your assets and property then you may be charged with a criminal offense and fined or even imprisoned.
You wait for the adjudicator’s decision
The adjudicator has 28 days to make their decision. If they need more information then they’ll ask for it, which gives them a further 14 days. If your application is rejected then you can ask for a review and if you’re still rejected then you can appeal in court.
You must complete form N161 on GOV.uk and submit it to the nearest court to you that deals with bankruptcy.
If your order is made
If you get your bankruptcy order then you’re officially declared bankrupt and, if your accounts weren’t already frozen, they will be now.
You must cooperate with the official receiver
When you’re bankrupt, your assets and property are under the official receiver’s control. You’ll have an interview with them within 14 days (most often over the phone) to talk about your circumstances and bankruptcy.
The OR handles your bankruptcy by distributing your money and property between creditors and also by supervising your bankruptcy trustee. The decisions are out of your hands and while you may not like them, they’ll be fair and well-considered. You must cooperate or your discharge could be delayed.
You’ll probably need a new bank account
While you’re bankrupt you can’t have a bank account that offers a checkbook or an overdraft. You might face difficulty finding a suitable account, although you can always ask for a very basic one so you can receive wages and benefits and pay bills.
After 12 months you’ll be discharged from your bankruptcy
If you cooperate fully with the OR, you’ll be discharged from your bankruptcy after one year.