Being bankrupt
Question
Things have become pretty rough for me financially so I am considering bankruptcy. What's involved, and where do I start?
Answer
It is always possible to go bankrupt. This means you are legally declaring an inability to pay creditors (i.e. debts you are unable to cover). But there are penalties to consider. For example, you will be unable to apply for credit for a period of time determined by the court, some of your possessions may have to be sold, and news of your bankruptcy may be made public. What's more, as a bankruptcy declaration will be a feature of your financial history, you need to think of the possible consequences of this action on any future employment, as well as your ability to rent or purchase property.
When you appear in court to make the application, it's quite likely that the judge will not allow you to go bankrupt without having taken advice from an organisation such as the Citizens Advice Bureau (CAB), or a debt counselling service such as National Debtline, which you can contact on 0808 8084 000. In many ways, this should be your first port of call in order to weigh up whether declaring yourself bankrupt is the right move to make.
The Insolvency Service, the government department that deals with bankruptcy, has a great deal of information that can further explain the process and possible consequences. There is also a telephone helpline on 0845 6029 848 that you may find useful.
Updated: 16/03/2010
Question answered by CAB
