Definition
Bankruptcy
Bankruptcy is a legal process for people who cannot repay their debts. Most debts are written off after 12 months, but it has serious consequences including effects on your credit file, restrictions on borrowing, and potential loss of assets.
Common misunderstandings
- Bankruptcy is not the only option for dealing with unmanageable debt — debt management plans, IVAs and DROs may be more appropriate depending on your situation.
- Bankruptcy should only be considered after taking professional, free debt advice.