Bankruptcy

[tamborine]

Is it true that you can run up �25k or more debt, declare yourself bankrupt, and the debt is completely written off?

[shero101]

Just to add some clarity (I am a debt advisor), bankruptcy is often the best option to clear your debts if you can no longer service them. Normally you would look at this option if your unsecured debts are over �12k. The Official Receiver will allow you to keep a car valued around �2k or less and you do not lose the things in your house unless you own something of significant value. If you own a property and have no equity or negative equity you would be allowed to keep the house provided you keep up with your mortgage or secured loan repayments (there is a small fee to do this). The period from the order to discharge is normally 12 months but often as low as 6 months. You can start looking at getting credit again after 3 years from the bankruptcy and it remains on your credit file for 6 years. BIG TIP : If you owe less than �15k and can't service your debts, own very little, don't own a house or a car valued over �1k and are in very serious financial difficulty (ie unemployed) look at getting a Debt Relief Order (check it out in Wikipedia) from Citizens Advice. This is new and an alternative to bankruptcy.