When facing the fear of being unable to repay your debt or even meet the minimum monthly payment, a snap answer can be “Just write off my debt”.  This is a common feeling for people who are struggling to make their credit repayments. Bankruptcy may seem like the answer however there are other debt solutions you may be applicable for which you should consider too, like a debt management plan.

When deciding which debt solution to enter you should be aware of the positives and negatives associated with the solution, so you can make an informed choice.


Bankruptcy lasts for 1 year and at the end of the solution you are discharged, however it’s not always as simple as it seems. For instance, did you know?

Costs: There is a cost to make yourself bankrupt? If your debt is over £15,000 the cost is £700. The £700 is made up from £525 from the Official Receiver’s fee and £175 court fee. If you are on benefits or have a low income you could apply for exemption from the court fee. Should your debt be below £15,000 then the Debt Relief Order route to bankruptcy costs £90.

Credit file: Your credit file will state you have been bankrupt and this will last for 6 years.

Monthly payments: If the Official Receiver in Bankruptcy decides you can afford to make a contribution towards your debt then they can impose an Income Payment Order (IPO or IPA) which lasts for 3 years. This means any disposable money you have will be required for your Bankruptcy for the 3 year period.

Assets: If you have equity within your assets which your trustee feels would be beneficial for your creditors  then you would be asked to sell this asset. For instance a car with £1,000 equity would generally be fine if it’s required for work purposes, however if your car has £10,000 equity then this would have to be sold. You would be given funds for another vehicle enabling you to continue your employment.

Employment: Some employers have a clause in the employment contract stating you cannot be made bankrupt and retain your job. It’s always best to check your employment contract first.

Positions held:  You are unable to continue as a director of a limited company if you are bankrupt.

If Bankruptcy is the right solution

If Bankruptcy is the correct solution for you then Debt Support Trust would be able to point you in the right direction so you can proceed with your Bankruptcy. You can telephone Debt Support Trust on 0800 085 0226.