What is the bankruptcy process for those that need help with debt?

If you need help with debt, and you decide that you do not want an IVA or to do debt management, you need to consider bankruptcy. This is a quick guide to what you need to do.

In order to declare yourself bankrupt, you must be insolvent. That means that your liabilities must be greater than your assets and/or you cannot pay your debts as and when they fall due. The legislation says that you must owe more than £750. This was set back in 1986, and so is out of date. Everybody who goes bankrupt owes many times this amount.

If you are insolvent, you next need to ascertain which is your local bankruptcy court. Not every court in the UK has bankruptcy jurisdiction. You can get the information on which court you need to apply to from the Courts Service at your local court.

When you have decided on your local court, you need to get hold of a bankruptcy pack. You can down load these on line. Alternatively call your local court and they should send you a pack or you can collect the pack from them.

Your pack will contain, a Petition, and a statement of affairs, plus a guide to filling the forms in.

Your petition contains questions about your name and address and whether you have been bankrupt before. It is only two pages long.

The statement of affairs is a much bigger affair, being 35 pages long. It requires detailed answers to questions about assets and liabilities, income and expenditure. You can get help from various professionals with the completion of this document.

You need to take three copies of both documents to court.

Before you simply turn up at court check the procedure as some courts like Leicester have a two day process and others like Stockport and Burton on Trent have a waiting list which may be up to two months.

The cost is £510 for those who get no help with fees being a court fee of £150 and an Official receivers deposit of £360.

At the court you need to file your papers and the court staff will check your documents and take your money. You may or may not have to see the Judge.

Again each court has a different hearing process. In Leicester the District Judges often do not wish to see you. In Coventry the Judges always want to see each person.

The District Judge makes an order and you are then bankrupt for one year.

If you need help filling in your papers, please seek professional help. Some companies will even walk you through the whole bankruptcy process.

Courtney, a certified Credit Counselor from American Financial Solutions, provides information on how to get out of debt. If you want more information on how to get out of debt, visit www.myfinancialgoals.org

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