Credit Card Debt & Brankruptcy

Mrs_Wilson

Over the years debts have mounted with various credit card companies and I now owe £25,000 (approx). I have kept up regular payments, in spite of the financial hardship I am experiencing. There is little hope that I will ever be able to repay the debt fully and now I have just lost my job it makes it even more unlikely.

I have been advised to go Bankrupt by a friend and he claims this will get the credit card companies off my back. I have always paid my debts so I am reluctant to do this, but now I have lost my job the idea seems to make more sense. I have a mortgage on my property so If I chose to go Bankrupt would I be forced to leave my home?

Thank you

National_Debtline

Hello there,

If you would decide to take the bankruptcy option there could be a risk of losing your home, especially if you have equity within it. Equity is the difference between the house value and any mortgages that yout have. If you are in negative equity it *may* be possible for you to remain within the property. In addition, if someone is prepared to buy you out of your equity you could also stay within it. What I've written is just a very basic outline, there are various rules that would need to be considered. The Insolvency Service has written a useful guide about the home in bankruptcy, you can find it here:

https://www.gov.uk/government/publications/bankruptcy-your-home

If you were to become bankrupt, all your debts would be written-off. It is a very formal process with lots of implications to consider. Our bankruptcy fact sheet outlines the basics.

Best wishes,

David @ National Debtline.