There are no guidelines as to a minimum amount if you are doing your own bankruptcy, but if a creditor wishes to make you bankrupt the minimum is now £5000 having recently been increased from £750.
Having said that, a Judge is unlikely to sign off a personal bankruptcy if the amount is less than £10,000, unless it is absolutely clear that all other debt solutions – especially a Debt Relief Order – have been explored. The courts now routinely ask if people have taken professional advice prior to applying for bankruptcy and if they have not, the case will either be rejected or deferred.
There are other options available if bankruptcy is not for you
You might consider a Debt Relief Order (DRO), which is often described as a ‘mini bankruptcy’. However, very few people actually qualify for DROs as the criteria are so strict. Not only do your debts need to total less than £20,000 but you need to be on a very low income (or on benefits), have virtually no disposable income at all and have no assets worth mentioning. If you Google the exact criteria and feel you might qualify, it can be arranged through your local CAB.
Debt Management Programmes are temporary solutions that effectively keep creditors at bay, but do not solve the problem of getting rid of the debt. If you are paying £70 per month to a DMP, you can be certain that your debt will never reduce, though it will at least stop the phone calls. In fact, the only people who ever benefit from DMPs are the companies who arrange these facilities, as they get a cut of every payment made.
We’ve discussed IVAs elsewhere on this site, but in brief they are an expensive option that are only really suitable for those protecting significant assets and not for everyday folk living in rented and holding down everyday jobs.
‘What is the minimum amount for which I can go bankrupt’ is just one of hundreds of questions we’ve answered over the years, but feel free to call us on 01425 600129 if you have any more questions or need bankruptcy help. We are here to help.