A statutory demand will be issued to discharge the debt. If no response is received within 21 days, bankruptcy proceedings can be issued. The debtor must owe at least £5,000 for bankruptcy to be an option.
If the debtor is made bankrupt their assets, such as property or cars, will be sold to discharge the debts. Their bank accounts will be closed and they will be unable to apply for credit. A notification of the bankruptcy is advertised in the local newspaper, which is often a strong deterrant. The bankruptcy lasts for one year, but credit reference agencies will keep a record of the bankruptcy for up to 6 years.