Dealing with your non-priority debts

Bankruptcy

Bankruptcy can be an option if you owe a lot of money, have no assets, and can see no way of ever paying the debts off. Creditors can make people bankrupt but this is rare for non-priority creditors such as banks or credit card companies. You must owe £3,000 or more to that creditor before they can make you bankrupt. Sometimes, two or more creditors may 'club together' to make you bankrupt but this is rare.

See our fact sheet:

Bankruptcy.

You can make yourself bankrupt if you meet certain criteria, but you have to pay a fee. Once you are bankrupt, your creditors can usually take no further action against you but going bankrupt can have important consequences. For example, if you own your home and it is worth more than your mortgage, your home could be sold as an asset.

Your bankruptcy will normally last for six months or one year, depending upon how you went bankrupt. Usually debts that have not been paid are then written off and you are 'discharged' from the bankruptcy. You may still have to make monthly payments for a total of four years, depending on your surplus income.

If a creditor has threatened to make you bankrupt or you think it may be an option for you to consider, contact us for advice.

Extra advice:

sample letter

National Debtline has a sample letter you can use to ask your creditors to write off your debts.  ​​

Will my creditors write off my debts?

If you have no money for creditors and no assets, creditors may agree to write off your debts. This is very rare but may be an option if your circumstances are extremely difficult due to illness, age or a death in the family. You will need to provide evidence to your creditors of your circumstances.