Bankruptcy

What is Bankruptcy?

In the last few years there’s been a noticeable trend in the rise of bankruptcies especially amongst young people nearly 19% of individual bankrupts being under the age of 30.

It is not the easy option people perceive and can cause untold problems in the years to come.

Bankruptcy is one way of dealing with debts you cannot pay. It is a Court Order that you can apply for if you’re in debt. It may be the best way for you to free yourself from excessive debts. The bankruptcy proceedings:

• Free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and 
• Make sure your assets are shared out fairly among your creditors.

Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves. Separate publications about these insolvency procedures are available

If bankruptcy proceedings are taken against you, or you are thinking of making yourself bankrupt, you should seek your own legal or financial advice from a debt advice centre, Citizens Advice Bureau, a solicitor, a qualified accountant, an authorised insolvency practitioner, or a reputable financial adviser.  

Other organisations also offer insolvency advice and debt counselling. Some of them are entirely reputable and offer a professional service. However, others are controlled by individuals with no obvious qualifications who appear to be motivated mainly by a desire to exploit an already difficult situation. Beware, particularly of unsolicited approaches through the post or by telephone.

If you are not bankrupt

Bankruptcy is a serious matter. You will have to give up any possessions of value and your interest in your home. It will almost certainly involve the closure of any business you run and the dismissal of your employees. Bankruptcy will also impose certain restrictions on you.

You do not have to become bankrupt just because you are in debt. Look at the alternatives to bankruptcy as soon as possible in case they are more suitable in your situation.