I Want to Declare Bankruptcy - How Can I Afford to Pay the Court Fee?
For many people, declaring bankruptcy is the best way to deal with a serious personal debt problem. However, the cost often rules out this option for those most in need.
If you declare bankruptcy, your debts are taken away from you and all collection activities from your creditors are stopped. Contrary to popular myth, you are allowed to keep all of your reasonable household goods and your name is not advertised in the local newspaper.
The major disadvantage of bankruptcy is that if you own your own home and there is equity in it, you could be forced to sell.
It is therefore understandable that homeowners often discount the bankruptcy option.
Cost of bankruptcy prohibitive
However, non homeowners may also be dissuaded from this solution even if it is clearly the best for them because of the cost.
It currently costs 510 to declare yourself bankrupt. This includes a court fee of 150 and contribution towards the administration of 360. These charges are due to rise by 90 to a total of 600 in April 2010.
The question is, if you are already struggling to repay your debts, where does this money come from?
If you are not lucky enough to be able to borrow the bankruptcy fee from friends or family, it may be possible to save for it. The way you do this is to stop making any further payments to your creditors. Put the money you save in this way towards the bankruptcy fee.
When you stop paying your creditors it is highly likely that they will contact you and demand payment. However, if you have already made the decision to declare bankruptcy there is really very little action they can take against you.
Debt Relief Order
If you stop making payments to your creditors but you still feel that it will be impossible to save up the fee to declare bankruptcy, you may be able to consider a debt relief order (DRO).
The cost of a DRO is 90. The outcome is similar in the sense that your debts are taken away from you and your creditors are not allowed to continue to try and collect further money from you.
However, you can only apply for a DRO if your debt is less than 15,000, your assets less than 300 and you cannot afford to pay more than 50 a month towards your debts.
The tight criteria surrounding debt relief orders has lead to their criticism as many who cannot afford the cost of bankruptcy and could benefit from this legislation are prevented from doing so.
For many people, declaring bankruptcy is absolutely the right solution for dealing with their debt problem.
If you are considering bankruptcy it is important to recognise that there is an associated cost. However, this should not put you off from considering the solution.
You should take advice about how to pay for the required fee. If you are unable to borrow from family or friends, the most common way of doing this is to save up by stopping any further payments to your creditors.
If you have little or no money available, you may qualify for a debt relief order. However this option is restricted to those with debt of less than 15,000
If you declare bankruptcy, your debts are taken away from you and all collection activities from your creditors are stopped. Contrary to popular myth, you are allowed to keep all of your reasonable household goods and your name is not advertised in the local newspaper.
The major disadvantage of bankruptcy is that if you own your own home and there is equity in it, you could be forced to sell.
It is therefore understandable that homeowners often discount the bankruptcy option.
Cost of bankruptcy prohibitive
However, non homeowners may also be dissuaded from this solution even if it is clearly the best for them because of the cost.
It currently costs 510 to declare yourself bankrupt. This includes a court fee of 150 and contribution towards the administration of 360. These charges are due to rise by 90 to a total of 600 in April 2010.
The question is, if you are already struggling to repay your debts, where does this money come from?
If you are not lucky enough to be able to borrow the bankruptcy fee from friends or family, it may be possible to save for it. The way you do this is to stop making any further payments to your creditors. Put the money you save in this way towards the bankruptcy fee.
When you stop paying your creditors it is highly likely that they will contact you and demand payment. However, if you have already made the decision to declare bankruptcy there is really very little action they can take against you.
Debt Relief Order
If you stop making payments to your creditors but you still feel that it will be impossible to save up the fee to declare bankruptcy, you may be able to consider a debt relief order (DRO).
The cost of a DRO is 90. The outcome is similar in the sense that your debts are taken away from you and your creditors are not allowed to continue to try and collect further money from you.
However, you can only apply for a DRO if your debt is less than 15,000, your assets less than 300 and you cannot afford to pay more than 50 a month towards your debts.
The tight criteria surrounding debt relief orders has lead to their criticism as many who cannot afford the cost of bankruptcy and could benefit from this legislation are prevented from doing so.
For many people, declaring bankruptcy is absolutely the right solution for dealing with their debt problem.
If you are considering bankruptcy it is important to recognise that there is an associated cost. However, this should not put you off from considering the solution.
You should take advice about how to pay for the required fee. If you are unable to borrow from family or friends, the most common way of doing this is to save up by stopping any further payments to your creditors.
If you have little or no money available, you may qualify for a debt relief order. However this option is restricted to those with debt of less than 15,000