Money Wellness
Image of the tour de france. Bradley Wiggins faces bankruptcy - find out why and what it means
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calendar icon17 Jun 2024

Sir Bradley Wiggins is declared bankrupt. Find out about bankruptcy and what it means for your money

Sir Bradley Wiggins, the eight-time Olympic medal winner, has been declared bankrupt after falling into financial difficulty.

The former cycling champion entered an Individual Voluntary Arrangement (IVA) in 2022, which failed in January this year.

His personal financial problems follow the liquidation in 2020 of Wiggins Rights Limited, a company he owned with his former wife, which had debts of £650,000. In November last year, creditors said they still hadn’t been paid any of the money owed for the outstanding director’s loan. Wiggins disputes this claim.

Here’s how IVAs and bankruptcy can help if you find yourself in a similar financial position to Wiggins.

What’s an IVA?

An individual voluntary arrangement (IVA) is an agreement with your lenders to repay part of your debt and have the rest written off. Find out more here.

How can an IVA fail?

IVAs can fail if you miss payments and your creditors won’t accept a lower amount or agree to settle early. When this happens, your insolvency practitioner (IP) will send you a certificate of termination which ends the IVA.

When your IVA fails:

  • you won’t be protected from creditors seeking collection
  • you will still owe the outstanding balances
  • interest and charges will resume
  • creditors could petition to make you bankrupt

How IPs reduce the chances of an IVA failing

Although IVAs do fail from time to time, a reputable IP will do everything they can to prevent this from happening. This includes:

  • making sure an IVA is the most appropriate solution for your circumstances
  • ensuring your payments are affordable
  • encouraging you to contact them if you face any difficulties or your situation changes
  • carrying out regular reviews

If you’re struggling to make your IVA payments and you contact your IP, they may be able to speak to your creditors and reduce your payments.

What is bankruptcy?

Bankruptcy is a way to deal with debts you can’t pay. It involves selling your assets, such as your house, car, or jewellery, and sharing the money among your creditors. Depending on your income, you may also be asked to make payments towards your debts for up to three years but only if you can really afford to.

You might be able to declare yourself bankrupt if:

  • you can’t afford to pay back what you owe
  • the value of your possessions is less than the amount you owe

Sometimes creditors apply to have people made bankrupt – as in the Bradley Wiggins case. This is usually a last resort and doesn’t happen very often. If your creditors choose to do this, you’ll be affected in the same way as if you applied for bankruptcy yourself. But your creditors will pay the fees instead of you.

What does bankruptcy mean for my money? 

Bankruptcy usually lasts 12 months and, after that time, a proportion of your debt is written off, offering you the chance of a fresh start.

You’ll be protected from your creditors, who will freeze interest and charges, and stop any attempts to collect the money you owe them.

Bankruptcy will show up on your credit report for six years or until you’ve been discharged if this takes longer. During this time, you might have trouble borrowing, as banks will see you as a risky customer.

Until you’ve been discharged from bankruptcy, you’ll have to tell lenders when you apply to borrow more than £500.

Even after you have been discharged, lenders might still ask if you've ever been bankrupt, especially if you're trying to get a mortgage.

Having said this, in some circumstances, bankruptcy may be your best option for a healthier financial future.

Find out more about bankruptcy here.

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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