Finance

How to file bankruptcy for an individual in UK

Filing bankruptcy for an individual is always a difficult consideration. If somehow you reached that point in which there is no other alternative than to declare yourself bankrupt and you live in the UK than this guide is for you. Make sure you read it carefully as the process of filing for bankruptcy for an individual in UK does need some careful planning.

Before you do anything follow this simple checklist: make sure you are insolvent, try to realize what impact this action will have on your life, try seeing if there are no other alternatives and finally if you decide that bankruptcy is the way to go make sure you don't pass the cash flow test.

Initiating the process

The process of filing bankruptcy is started via a petition. In this case it will be you the debtor that will file the petition. Most of the time this is the best way to initiate the process as it tends to give the creditors a clearer prospect of what will follow and is seen as a more elegant way as you the debtor will have to pay the fee for the process.

Before you file bankruptcy make sure you get yourself organized. Gather absolutely every material regarding you and your business. This includes, but is not restricted to: all the accounting information, a comprehensive list of your assets, a specific file for each one of your creditors and if it is the case all the legal actions forwarded against you.

Withdraw money from bank accounts

There is also the matter of timing as all of your bank accounts will be frozen immediately as you start the process and closed afterwards. It is advisable to withdraw all the money from the bank and then file for bankruptcy. You can start a basic bank account later on.

Easier bankruptcy laws

The laws now acting in UK regarding bankruptcy are much more relaxed than they used to be. For the case of the no fault bankruptcy you can get a discharge after 12 months. This is why it is particularly important that you file your bankruptcy correctly and that you reach some agreement with the creditors prior to the process itself.

With all these issues in mind it is the time to start the process. You must visit your local County Court and file your petition. There is usually an associated fee to this step, but it is highly worth it as the experts' advice is priceless. The form that you will need to complete may look overwhelming at first, but don't panic, people are there to help you complete it.