Published in Debt Advice Features on Saturday, March 17 2007

In bankruptcy the idea behind it is to enable a stranger to come and investigate you financial position, look into why you were made bankrupt.

Anybody who is struggling to pay their debts can go bankrupt, but it is a very severe way to achieve financial freedom. Bankruptcy should be seen as a last resort and should only be considered once the alternatives such as a Debt Management Plan or an Individual Voluntary Arrangement have been explored. In order to petition for you own bankruptcy you must be a English or Welsh resident and can afford the fee of £485. Before making the decision ensure you get advice. Once you are made bankrupt, you will no longer be in control of your assets. The only things you may keep are items or equipment needed for work or items needed for household purposes, i.e. bedding, furniture, clothing and other basic household necessities.
All other assets will be disposed of by either the IP (Insolvency practitioner) or the OR (Official Receiver) for sale, they will use the monies to go towards the fees and costs and expenses of the bankruptcy and then your creditors.