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Dealing with excessive personal debt

Contents

In this article we discuss the bankruptcy procedure you would follow to make yourself bankrupt, the effects of a bankruptcy order, how your assets will be distributed amongst your creditors (the people you owe money to) during your bankruptcy, when you will be discharged from bankruptcy, and some alternatives to bankruptcy.

What is bankruptcy?

Bankruptcy is a process that can be used to deal with your insolvency. You will be insolvent if you can't pay your debts.

There are detailed rules but, in very broad terms, the purpose of bankruptcy is:

(1) to ensure that your assets are collected in, sold and the net proceeds shared amongst all your creditors in proportion to what they are owed; and

(2) to give you a fresh start, freed from the burden of your debts.

Alternatives to bankruptcy

There are alternative procedures that could help you deal with your debts without being made bankrupt, such as:

What is the law guide

The Desktop Lawyer law guide aims to present the law to you in a comprehensive yet jargon-free and easy-to-read format. Our law guide is constantly kept up to date with changes in business and family law by our team of in house solicitors, and includes information across all the legal jurisdictions in the UK.

Our law guide is free to use. Where we provide documents related to this area of law, or where they may help you with any legal issue in this area, they will be listed to the right of this message.