How much debt do you have to be in to go bankrupt?

If you want to petition for your own bankruptcy, there isn't actually a figure 'set in stone' for how much debt you need. Basically, you need to have an amount of unsecured debt that you simply can't afford to repay in a realistic amount of time. The up front fees for bankruptcy can cost up to £700.

Bear in mind, however, that if your lenders want to make you bankrupt they may be able to if you owe over £750.

Should I make myself bankrupt?

Going bankrupt is a big decision - but one that could help you out of serious debt problems.

You must only consider bankruptcy if you can see no other alternative, as it can have negative effects on several aspects of your life. If you're a homeowner, for example, your home will probably be sold to cover the debt - and you might not be able to hold certain job positions, like company director or school governor. It will also damage your credit rating for six years, which means it will be more expensive and more difficult to get further credit - like a mortgage, bank account or loan - during this time.

Despite these disadvantages, however, bankruptcy is a way to rid yourself of your completely unmanageable unsecured debts. When you enter bankruptcy it usually takes one year (but you may be asked to make payments towards your debts for up to three, if you can afford it). Once you're discharged any unsecured debt remaining that you haven't repaid will be written off.

If you're not sure whether bankruptcy is right for you, our professional debt advisers could help. This page could give you some bankruptcy advice, and if you'd like a debt expert to call you back, you can fill in the call-back form.

What are the alternatives to bankruptcy?

If you think you can afford to make a reasonable payment each month towards your unsecured debts, you might want to consider an IVA (Individual Voluntary Arrangement). This can reduce your monthly debt repayments to a more affordable level each month, and once your IVA is completed (usually after five years) any unsecured debt that's remaining will be written off.

Homeowners often find IVAs preferable to bankruptcy - as you won't be at risk of repossession (though you might be asked to release some of the money you've put into your home). The downside to an IVA when compared to bankruptcy, however, is the fact that you will usually have to pay for longer, and wait longer for your unmanageable debts to be written off. Both will damage your credit rating for six years.

If an IVA sounds like it could be right for you, click here and fill in the 'find out if you qualify' form, and one of our advisers will call you back with some debt help. You can also read more about IVAs.

Related resources

• Guide to debt collectors and bailiffs
• Advice with bankruptcy
• Bankruptcy v IVA - Which is better?
• LILA - the Low Income Low Asset route to bankruptcy

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