0161 667 2599

What you need to know about bankruptcy

Debt Solutions»Bankruptcy»What is bankruptcy?

What is bankruptcy?

If you simply can't afford to repay all your unsecured debts, bankruptcy could let you repay as much as you realistically can and write off what you can't.

Bankruptcy in Scotland is sometimes known as 'sequestration'. It involves repaying as much of your unsecured debts as possible - sometimes involving the sale of your assets - before the unsecured debt you can't afford is written off.

To find out whether bankruptcy could help you, request a callback or call 0161 667 2599 to discuss your options with one of our friendly debt advisors.

How does bankruptcy work?

To apply for bankruptcy, you must pay a £200 fee (£90 for MAP) to the Accountant in Bankruptcy (AiB) and fill in the relevant forms (we can help you find them). If your bankruptcy is agreed, your unsecured debts and all interest on those debts will be frozen. Rights to your assets (i.e. your home, if you're a homeowner, and a car if it is worth more than £3,000) will be handed over to a 'Trustee', who oversees your bankruptcy. These assets will normally be sold to help repay your lenders. If you can afford to do so, you may also be required to make payments to your unsecured lenders for up to four years.

Bankruptcy is a serious commitment that will affect your credit rating for at least six years. It could also prevent you from holding certain jobs, such as the managing director of a company or a judge.

Depending on your circumstances, there may be other restrictions, such as you cannot borrow more than £2,000 without telling the lender you have been made bankrupt.

For more information about how bankruptcy works, click here.

Is bankruptcy suitable for me?

Bankruptcy will only be an option if you genuinely can't afford to repay everything you owe. If there is any reason to believe you could pay everything back within a reasonable period, your application will be rejected.

It can be difficult to tell which debt solution is best for your needs, so request a callback if you're unsure. Or talk to one of our experts - call us on 0161 667 2599.

How long does bankruptcy take to set up?

If we help to arrange your bankruptcy, you can normally expect everything to be sorted within a few weeks of contacting us, provided you send us the relevant information in good time.

Of course, if we don't think bankruptcy is the best option for you, we'll recommend something more suitable. We always aim to get things up and running as quickly as possible, and it should never take more than a few weeks as long as everything runs smoothly.

How do I apply for bankruptcy?

We can help you. Get in touch on 0161 667 2599 and we'll let you know the next step. We'll talk you through your options, and if you agree that bankruptcy is the best option for you then you'll have to send us some information about your finances. Using this information we can put together your case and arrange for your bankruptcy to go ahead.

Find out more about the bankruptcy application process here.

Bankruptcy advice

Could we have a joint Trust Deed?

If you have joint debts that you can't afford, you could both enter into a Trust Deed. Although joint Trust Deeds don't exist, both your Trust Deeds will take your joint debts into account.

Read more