If you are unemployed bankruptcy might be an ideal debt solution for you. You may not have to make any further payments towards your unsecured debts.

• Can you go bankrupt if you are unemployed?
• Will you have to pay towards your debts?
• The cost of bankruptcy if unemployed.
• What of you get a job while bankrupt?

Do you want help to go bankrupt? Give us a call on 0800 077 6180 or complete the form below to speak to one of our experts

Can you go Bankrupt if you are Unemployed?

If you are currently unemployed you can go bankrupt if you wish. Your employment status does not affect your eligability. The key criteria are that you have lived in the UK for the past 6 months and are insolvent thus unable to repay your debt.

Given your income may well be relatively low the solution could actually be ideal for you. There is no requirement for you to make further payments towards your unsecured debt unless you can afford to.

Having said that it is not suitable for everyone. There are other implications particularly if you are a home owner or own a car worth more than £1000.

Talk to us before you decide to go bankrupt. We will discuss all your options and ensure it is the best solution for you.

Will you have to pay towards your Debts?

Unlike the other debt management solutions bankruptcy does not require you to make ongoing payments towards your debts. You only have to do so if you have disposable income.

This is the difference between your income and your reasonable monthly expenditure. If you are unemployed it is likely that your disposable income will be zero. As such no ongoing payments will be required.

If you have other forms of income for example a monthly pension payment or child support these must be included in your calculation. As such it is possible to have a disposable income if you are unemployed.

If you gain employment while you are bankrupt and have a disposable income as a result you may have to start payment towards your debt.

The Cost of Bankruptcy if you are Unemployed

If you are unemployed you will still have to pay the full bankruptcy application fee. There is no exemption because your income is low.

You can borrow to pay the bankruptcy fee. Alternatively you may decide to save the money. In cases of particular hardship you might also qualify for a grant from one of the various charitable trusts.

It is possible to pay your bankruptcy fee in installments. However you will not be able to submit the application and get legal protection from your creditors until it is paid in full.

If your debts are less than £20,000 and you are not a home owner you may be eligible for a Debt Relief Order (DRO) which costs just £90 to implement.

What happens if you get a Job while you are Bankrupt?

If you get a new job before you are discharged from Bankruptcy you must tell the official receiver. They will then send you a new income and expenditure budget to complete and return.

If your new job means that your income has increased and you now have disposable income you will be required to start paying this towards your debts. This is known as an Income Payment Agreement (IPA).

Your payments will then last for 3 years from the date your IPA starts. As such they will normally continue even after you have been discharged.

After you are discharged if no IPA is already in place you cannot then be asked to start one. This is the case even if you subsequently get a gob and your income goes up.