What if I change my mind about choosing an IVA?

Please note that an IVA is a legally binding arrangement and cannot be cancelled once a meeting of creditors has been accepted. Failure to maintain payments towards your IVA could result in a termination of your IVA.


Will my student loan be written off as part of bankruptcy?

If your student loan was taken out after 1st September 2004 then it can’t be written off. It will be treated as if the bankruptcy had never happened – if you are currently having payments taken directly from your salary then these will continue until the loan is repaid.

If you fall below the income threshold no payments will be made until your salary reaches the level where repayments automatically start. Note that interest will continue to accrue, as per your agreement with the Students Loan Company.

If your student loan was taken out before 1st September 2004, you can include the Student Loan Company as a creditor in your bankruptcy and your monthly payments to them should cease.

Will my job be safe if I’ve been made bankrupt?

Not always. If you are a member of a professional body you will need to check to see if you will lose your membership. This can result in you being unable to continue in your current role.

Further clarification will be available if you look at the terms of your contract of employment.

What bankruptcy advice should I get?

Always seek your own legal or financial advice about becoming bankrupt and the other options available to you. Official bodies like courts or the Insolvency Service won’t help you decide on your most appropriate way forward.

Debt Free Direct is happy to help you to review your own circumstances and advise on the most appropriate solutions available to you.

What are my alternatives to bankruptcy?

If bankruptcy isn’t a suitable or an agreeable option to manage your debt problems then you may want to consider the following options:

  • An informal arrangement with your creditors. You could write to all of them explaining your current financial position and agree an affordable payment plan to repay the debt.
  • A debt management company that will negotiate monthly payment with the people you owe money to as part of a Debt Management Plan. Your only obligation will be to provide them with regular information about changes in circumstance and make the agreed monthly payment, which they will pay to the people you owe money to. The arrangement generally continues until the debts and any accruing interest are repaid in full.
  • An Individual Voluntary Arrangement (IVA). This is a legally binding contract between you and people you owe money to – see our IVA FAQ’s.
What happens in court during a bankruptcy hearing?

The first step is to complete and submit the necessary forms with the bankruptcy fee. These will petition the bankruptcy clerk for you to become bankrupt with the County Court that has jurisdiction for bankruptcy in your local area.

The bankruptcy clerk will give you an appointment when your application for a bankruptcy order will be heard. This can sometimes be on the same day as you submit the application.

At your hearing, the court will do one of the following:

  • Stay or postpone proceedings – usually to await more information in which case a further hearing date will be set.
  • Dismiss your petition.
  • Appoint an insolvency practitioner if an Individual Voluntary Arrangement (IVA) is found to be more suitable.
  • Grant your petition if becoming bankrupt is found to be the way forward.