Step 1: Filing for Bankruptcy
The individual or a creditor can make someone bankrupt if the individual is unable to repay any outstanding debts. A court fee of £680 will need to be paid to proceed with the application.
Step 2: Asset Control by Trustee
After declaring bankruptcy, an Official Receiver/Trustee will take control of all assets. They can seize assets (e.g., property and cars) in order to realise them to repay the creditors.
Step 3: Opening a New Bank Account
As all bank/building society accounts will be frozen, it is recommended that the individual opens a new basic bank account.
Step 4: Discharge and Long-Term Impact
After a year, the individual will be discharged from bankruptcy, on the condition that they have cooperated with the Official Receiver/Trustee. However, it must be noted that the assets at the date the bankruptcy Order is made may still need to be realised after the first year and the bankruptcy will stay on the individual’s credit score for 6 years.
