How To Declare Bankruptcy

Bankruptcy has always been and is still to some extent considered to be a dirty word in the world of finance. Years ago, declaring bankruptcy came complete with a stigma and level of shame that was difficult to shake off. It is still considered in the same terms by some people today but more and more individuals are coming to accept it as a useful tool, albeit a last resort, to get creditors off your back and wipe the slate clean, so to speak. Choosing to declare yourself bankrupt is not a decision to make easily or take lightly so take your time before making a final decision. However, if you do decide to do so then this article will tell you exactly how to declare bankruptcy.

Before you look at how to declare bankruptcy, you need to make sure that you qualify for the process. For example, you must be a UK resident with a UK passport to prove it and have debt that corresponds to your residence in the UK. In short, your debt should have been run up in the UK. In addition, you should also have the money to be able to pay any court fees that are associated with the process of declaring bankruptcy. The amount you will be expected to pay to the court clerk is around the £600 mark. If you cannot afford to pay these costs then you will not be able to declare yourself bankrupt legally.

Assuming that you are able to declare bankruptcy, there are two ways of doing so. Firstly, you could employ a service to help take you through the process, although there are usually extra charges associated with that. Alternatively, you can do it yourself. It is not a complex process but you should follow each of the steps outlined below to accomplish the process of how to declare bankruptcy:
1. Find out where your local County Court is. You have to go through the courts to be declared bankrupt so finding out which one is closest to you is the first step.
2. As soon as you know which Country Court you are closest to, you need to call and speak to someone to confirm that you wish to apply for bankruptcy. It may be that you also need to confirm your address to ensure that you have found the right court. From there, the court officer you speak to will send you the relevant documents through the post, including a Bankruptcy Petition and a Statement of Affairs (documents 6.27 and 6.28). You should also confirm the charges you will be expected to pay at this point in time so that you have a frame of reference in place and know of any discounts that may apply to you. For example, you may qualify for a discount if you are on benefits.
3. Book an appointment to attend County Court in order to present your bankruptcy documents. Some courts do not require appointments in advance but others do so make sure you have one if necessary or alternatively have confirmed that it is OK to turn up at any time.
4. Fill in the forms that you need to in order to declare bankruptcy. Leave yourself plenty of time to do this because it can take quite some time with each ne being around thirty pages. Double check to make sure all the information you give is present and correct before making two photocopies (you have to submit all paperwork in triplicate).
5. Now you are ready to present your petition to be declared bankrupt at court. You must do this in person and many experts advise you to get there early in the morning so that you can declare bankruptcy that same day. The process when you get to court will vary depending on the County Court you attend though. Either a clerk or a judge will check through your paperwork, take payment and then witness your signature if you qualify for declaring bankruptcy. The judge will ultimately declare you bankrupt unless you are told that you have to visit an Official Receiver, who will declare the term of your bankruptcy and decide how your assets are to be divided.

There are quite a few points to take note of here but how to declare bankruptcy is not a difficult process. It may just take a while to go through the motions. Before you do any of the above though, make sure that you are absolutely certain that declaring bankruptcy is what you should do for the best. After all, it will be on your record for some time.

Andy Gorton is the author and editor of the Bankruptcy Clinic

Andy Gorton – who has written posts on Bankruptcy Clinic Blog.

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