If you are considering bankruptcy then you should have reached the conclusion that there is little prospect of your ever being able to service your debts and repay your creditors. You should also have dismissed entering into an Individual Voluntary Arrangement. You may have already tried one and failed. This isn’t unusual as 70% of all IVAs fail in the first 18 months.
Now you are looking for a solution that is going to allow you a fresh start. Bankruptcy does this. It is a mechanism that allows a debtor to write off all their current and foreseeable debts at the time the bankruptcy order is granted.
Once you have undertaken the income and expenditure and prepared the creditor list, you should know exactly where you stand. Once you know this you will be able to make clear choices and these choices are the beginning of the fresh start. There are certain steps that need to be taken when entering into bankruptcy:
- Once you have made the decision to enter into bankruptcy, a detailed history and background is important. You need to identify a timeline of where things started to go wrong. In other words, how have you ended up in the position you have ended up in?
- A full account of assets and liabilities. Don’t leave anything out or you run the risk of not submitting a full account of your circumstances and this could cause complications further down the line.
- Once the bankruptcy has been approved you can expect to have a 20 minute telephone interview or, in exceptional circumstances, a personal interview at the insolvency services offices. This is a formality and enables them to ask you questions relating to the application. It is important that you are open with this. Provided you have provided a straightforward account of your circumstances and income then there is really nothing to fear.
- It is important that during the 12 month term of the bankruptcy that you provide them with any changes to your circumstances, especially any change to your income. The same can be said if there is any change to your relationship or employment status. We are seeing more examples these days of people exiting the UK in search of new beginnings. Remember that you are only bankrupt in the UK. You are not bankrupt outside of the UK.