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What is bankruptcy?

Bankruptcy / Guide

If you can’t afford to repay your unsecured debts in a reasonable amount of time, bankruptcy may be a suitable debt solution for your situation.  

You’ll only have to make payments towards your debts if you can realistically afford to. These payments will take into account all of your essential living costs, to make sure that you can still pay for your rent/mortgage, food, utilities, travel costs and so on, and these payments can continue for up to three years.

You’ll usually be discharged after 12 months and whatever debt you can’t afford to repay in that time, that is included in your bankruptcy, will be written off. However, as mentioned above, if you can afford to make payments, they can continue for up to three years.

Bankruptcy may mean that assets you own, such as your home or car, could be sold to put towards your debts.

Next: What are the benefits and consequences of bankruptcy?

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