Personal bankruptcy occurs when individuals can no longer manage their debt. The purpose of bankruptcy is to convert your possessions, and any wages you receive, into a lump sum and instalment payments for creditors.
In principle, going bankrupt will leave you debt free, but your assets, such as your home, may be sold to pay creditors. There are some debts such as, court fines and student loans that are not written off in bankruptcy.
An individual can be made bankrupt in one of three ways.
Voluntarily - By the debtor themselves.
Involuntarily - By the creditor owed money (£750 Minimum).
The supervisor or anyone bound by an IVA.
A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun.
Bankruptcy should be considered as a last resort; after all other options (debt consolidation, IVAs etc.), have been explored.
Debt Consolidation Explained contains general information only. We strongly advise you to seek qualified professional advice before taking any action.