Bankruptcy is a way of dealing with debts that you cannot pay. If you have large debts and it would take a long time to clear these by making reduced payments or if you have no means of making any repayments to your creditors, you may wish to consider bankruptcy as an option. Most assets you own, including your home, can be sold to pay your creditors. Bankruptcy is more likely to be appropriate if you have no assets of any value.

Bankruptcy has the advantage of removing the pressure of dealing with individual creditors. Once someone is bankrupt creditors must deal with the Official Receiver or Trustee. Bankruptcy can help you make a fresh start. On 1 April 2004 the law on bankruptcy changed. Most people will be discharged from bankruptcy after a year. However, the court can make a bankruptcy restriction order which will extend beyond this time.

You can find a free guide to bankruptcy here. If you are considering bankruptcy, take advice first. You can call or email one of our money advisors or you can ring the Insolvency Enquiry Line on 020 7291 6895.