Bankruptcy - Think carefully before taking this route

Bankruptcy is the last resort as one finds themselves in a position to not reach an agreement with creditors over debt. Most creditors will only resort to a bankruptcy petition if they think they can recover a realistic part of their outstanding debt as a last resort.

An Administration Order would result in an Insolvency Practitioner overseeing the day to day running of a business, and in most cases would look to dispose of the assets for the benefit of creditors, this is itself is different to outright bankruptcy as any business would be wound up after the order.

One must bear in mind that once in bankruptcy specific rules apply and as such in most cases will be overseen by the Official Receiver. There are rules governing what and what cannot be allowed in respect of assets and such should be studied carefully.

Individual bankruptcy can have an affect in some cases on employment, credit and can carry a stigma so therefore one should look to what other alternatives are available before going down this route.

Company bankruptcy does not carry the same stigma however, you could be exempt from being a director of another company.

Bankruptcy if self-implemented through the court will carry a court fee which is approximately £600, however should one employ an Insolvency Practitioner the fees are normally £2,000-£2,500, however one should "shop around"

One might want to discuss matters with the insolvency service as this would be the most cost effective way forward and take guidance from what they advise.

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Before any decision is made one should look at our legal page and take independent legal advice.