How to declare yourself bankrupt

Personal debts in the UK are at a all time high. With debts rising in the UK by an astounding figure of 154 million pounds each day, people are left with taking the last resort, that is declaring bankruptcy. So in a society where debt seems to be the main financial avenues of staying afloat, it is not surprising that bankruptcy is at its peak today. By succumbing under the immense pressure of debts people are using bankruptcy as a means of eradicating their debts. And as the stigma attached to bankruptcy is slowly disappearing from the societal structure, bankruptcy is a common way out for most people in the UK who are in desperate need of debt help.

Bankruptcy is way to free yourself from debt. For most people it is a last resort ,and for some a new beginning. Bankruptcy can happen in three ways, voluntary, where you will start proceedings yourself; involuntary, by creditors you owe money to; or the supervisory of an IVA( individual voluntary agreement) that you have defaulted,can also petition the court.

The court has the final authority on all bankruptcy cases in the UK. For the bankruptcy process to begin, one has to file a petition in the court that he/she is unable to pay his/her debts. However if the petition is filed by creditors the UK law states that debts must be a minimum of £750, to fall under bankruptcy norms. The petition is submitted in the court of a county, along with a petition form and court fees which amounts to £125, which can be waived off if you meet certain criteria. At the same time a fee of £345 has to be paid for receivers work. It is also important for one to furnish all relevant documents of assets and income to the court.

Once the petition is filed the judgment lies with the district judge, who ensures whether the individual is eligible for bankruptcy and than takes the decision of declaring him/her bankrupt. Once an individual is declared bankrupt, the official receiver studies the petition and decides how the bankruptcy will be dealt with and decides the length of your bankruptcy, which is normally 12 months. Secondly , if you can make monthly payments towards your debts and thirdly, if you have any assets and how they will be treated to meet the asset value for the creditors.

It is difficult to think of bankruptcy as a good thing. But if it is your last resort, than you can look up to some of its positive sides. You will no longer be pursued by your creditors and they will have no choice but to accept that they will be paid only a portion of what is owed to them in full settlement of the debt. However there are some potential disadvantages of bankruptcy as in spite of being broke you have to incur court fees. You not only loose control of your assets but your situation is announced in the press. After being declared bankrupt it is not only difficult to get loans or credit cards but is also a deterrent factor in certain professions.

Despite all its implications bankruptcy should not be seen as the end of the road. Walt Disney went bankrupt after he lost a building deal. But he managed to recover. So, will you.

Click Here to speak with an IVA expert about clearing your debts forever.