Can I File Bankruptcy For Free - What Are the Costs of Filing For Bankruptcy?

The legal processes involved in filing bankruptcy will vary depending what country you are in, so the following information relates only to filing for bankruptcy in the UK. There are two main fees involved in filing bankruptcy and at least one of these cannot be waived, therefore filing bankruptcy will never be completely free.

Can I File Bankruptcy For Free - Court Fees

The Court Fee is currently £150, but is due to increase any time now. It is possible for the court to waive this fee for people who are on low income or claiming benefits such as Income Support. To apply for exemption from the court fee you need to use form EX160A. If you think you may be entitled to have this fee waived but are not sure, you should get in touch with the staff at the court, who will be able to give you the appropriate advice for your situation.

If you are suffering financial hardship, most of the main utility companies have trust funds which you may be eligible for. Get in touch with your electricity, gas and water suppliers to find out if they have such a scheme.

Can I File Bankruptcy For Free - Official Receiver's Fees

The biggest fee involved in filing for bankruptcy is the Official Receiver's fee, which is £360 from April 2009. This goes towards the costs of administering your bankruptcy and can never be waived. The fee is payable when you take your petition to court. The Official Receiver is the person appointed to dispose of your assets in order to raise money to pay off your creditors, and acts as your Trustee. What a treat, having to pay someone to sell everything you own!

Your trustee will deal with your creditors on your behalf, so after filing bankruptcy you will not normally deal directly with your creditors yourself any longer. The only exceptions to this are in connection with secured loans, student loan debt, overpayments of benefits, court fines and debts to utility suppliers. Any remaining debt will usually be written off at the end of your bankruptcy.

Can I File Bankruptcy For Free - Other Costs

If you swear your affidavit in a County Court you should have no other charges apart from the court fees and Official Receiver's fee. If you swear your affidavit in the High Court of before a solicitor, then there will be another small charge.

If you are filing bankruptcy as a married couple then you both need to pay the fees separately, as you cannot file bankruptcy for two people and only pay one set of fees. Similarly, if you are filing bankruptcy as partners in a business, each partner has to pay the fees separately. The exception to this is if all parties jointly apply to file bankruptcy under the Insolvent Partnerships Order.

All such fees can be paid in cash, or postal order, but not an ordinary personal cheque. The only acceptable cheques are a bank or building society cheque or a solicitor's cheque.

Can I File Bankruptcy For Free - The Bankruptcy Process

If you do need to file bankruptcy, the first thing you need is to get the appropriate forms from your local County Court. These are the Debtor's Petition and the Statement Of Affairs. Your creditors can of course petition for your bankruptcy themselves even if you do not want to file for it. Anyone to whom you owe more than £750 can do this, and would need to issue you with a Statutory Demand first.

If you file for bankruptcy it could result in you losing your home if you own it or have a mortgage on it. This can happen even if you own it jointly with someone else. Your home may even be at risk if you are in rented accommodation as some tenancy agreements do not allow for the property being occupied by an un-discharged bankrupt.

There are therefore costs involved in filing for bankruptcy and it is not possible in the UK to file bankruptcy for free. If you situation is so serious that bankruptcy is your only option, then saving up for these bankruptcy fees is probably well worth the effort.

Debt Consolidation Loan Consequences - Discover the Consequences of Debt Consolidation Loans

Debt consolidation is a very widely known idea and is therefore one of the first things that come to mind when people experience problems with personal debt. It is so widespread compared to other ways of tackling debt that it is often the only solution that people are even aware of. Anyone searching on the internet will find no shortage of ideas for dealing with debt, the vast majority of them designed to make money for someone else.

Borrowing more money is almost never the way to solve a debt problem. It is borrowing money that gets people into this position in the first place, so borrowing even more is usually the last thing they need. As well as understanding something about what is required to really solve personal debt problems long term, this article is designed to highlight some of the consequences of debt consolidation loans.

Debt Consolidation Loan Consequences: What Are The Attractions of Debt Consolidation?

I realise that one of the attractions to people of debt consolidation loans is just the sheer practicality of having only one main payment to think about instead of lots of smaller ones. This is clearly a benefit if you struggle to keep a track of all your debts and creditors. However, compared to whether the loan will actually solve your debt problem or not, this is a very minor consideration. It is surely better to find a few practical systems for getting yourself more organised than to take on a loan that will make your whole situation worse.

The other main attraction with debt consolidation loans is of course the promise of lower monthly payments. It may seem a bit obvious, but the length of time your repayments last is just as important as how much you pay each month. Reducing your debt repayments from £300 per month to £150 certainly looks attractive, but not if you are going to be making the payments for five years when your previous repayments would end after two years. This move would reduce your monthly repayments, but mean you spend £1,800 more to clear your debts.

I do not want to say that debt consolidation is never a good option, but it is the best option an awful lot less frequently than people think. For this reason, it is something that requires some understanding above and beyond the positive spin of the loan companies before going down that route.

Debt Consolidation Loan Consequences: When Debt Consolidation May Be A Good Option

• When you have debts that are at particularly high rates of interest.

• When the interest rates have dropped considerably in the period since you took on the debts.

• When you have properly considered your financial position and know for sure that you can manage to keep up the repayments.

To properly understand what you can and cannot afford in terms of repayments, you should prepare a Personal Financial Statement. Help and templates are available online to assist you in this process.

Debt Consolidation Loan Consequences When Debt Consolidation Is Best Avoided:

• When you have tried debt consolidation loans before and you have not managed to keep up the repayments.

• When you need a loan to pay off a previous debt consolidation loan.

• When you want to pay off credit cards in order to carry on using them.

• When you have not worked out your exact financial position and what you can afford to pay each month.

• When you have not worked out the total cost of paying back your existing debts and compared this to the total cost of paying off the debt consolidation loan.

• When the loan is to be secured against your home.

Debt Consolidation Loan Consequences: Beware of Secured Loans

Many offers of debt consolidation loans are only available to homeowners and may also be advertised as suitable for people with poor credit ratings. This is because the loan will be secured against your home, so they do not have to be so picky about your credit rating as they will simply sell your home to get their money if you default.

Possible Debt Consolidation Loan Consequences:

• Your overall debt will probably be increased, meaning you are in debt for much longer and have to pay back much more than you otherwise would have.

• You do not tackle the root causes of your debt or learn how to deal with it long term.

• If you do not keep up repayments on the new loan your situation could become even worse than before.

• If you take out a loan that is secured against your home, you could lose your home if you do not keep up repayments.

Debt Consolidation Loan Consequences: Conclusions

While the right debt consolidation loan at the right time could be the answer, it is far more likely that they will make things worse, and the possible consequences can be quite serious. If you do wish to go for debt consolidation, always shop around and compare rates, and always compare how much you will pay back under the loan with what you will pay in your current situation.

There is only one real way to tackle your debt problems long term, and that is to understand exactly what your financial situation is and negotiate with your creditors to repay your debts on the basis of what you can actually afford. This must be coupled with tackling any issues around irresponsible spending or borrowing.

For further information on dealing with debt without borrowing more money visit this Debt Assistance website