Bankruptcy The Details
Summary
Bankruptcy is not very pleasant but if you’re facing it, it is easier if you know the system. This article gives an insight into the procedure
If you have serious debt you may be considering bankruptcy. It is important to realise what bankruptcy necessitates and whether it is the right decisionfor you.
What does bankruptcy mean? Bankruptcy is a intrim legal stage. When bankrupt, your non-essential assets for example property and possessions including excess income are used to pay some of your creditors. At the end of the bankruptcy period, most debts are discharged. This may be a helpful way of eradicating iva help that you might never be able to pay.
How long will you be bankrupt for?. Bankruptcy ordinarily lasts for one year. After this, you’ll be ‘discharged’ from your bankruptcy dispite however much you still owe. You may be discharged earlier if you have co-operated fully with the Official Receiver. Still, in a minority of cases and if you have conducted yourself foolishly, bankruptcy can last for much more than one year.
How would you be made bankrupt? A court pronounces you bankrupt by issuing a ‘bankruptcy order’ after it’s been presented with a ‘bankruptcy petition’. Typically this happens in 1 of 2 ways.
1st you can make yourself bankrupt. A debtor’s petition form can be downloaded from the I S website or obtained from county courts with bankruptcy jurisdiction. The form should be filled in and then taken to the nearest county court, that has bankruptcy jurisdiction. A fee of £150 and deposit of three hundred and sixty pounds is payable at this time. This cost cannot be waived.
What does a creditor have to do to make you bankrupt?. Your creditors can present a creditor’s petition if your unsecured debt is over 800 pounds. Once the bankruptcy process has begun, you have to co-operate fully even if it is a creditor’s petition and you dispute their claim.
From where do bankruptcy orders come from? Bankruptcy petitions are in general put forward in a county related court near where you reside or conduct business.
Who deals with your bankruptcy? As soon as a bankruptcy order has been made against you, your creditors cannot hunt you for repayment. Payment becomes the task of the trustee. An Official Receiver is selected if you do not have assets. If you have some assets, an Insolvency Practitioner will be agreed to act as trustee and sell your assets to pay your creditors.
What is the outcome when you become bankrupt?. After you’re bankrupt, the Official Receiver, or chosen trustee, can sell your assets on your behalf to pay out your creditors. Although, some goods aren’t classed as assets for this purpose, for example: required work equipment and needed household items such as clothing, bedding, furniture.
The Official Receiver will go through your income taking into consideration expenses and work out if payments should be made to your creditors. You may be asked to sign an ‘income payments agreement’ to pay set monthly payments from your income for four years.
Your requirements when you are bankrupt. You have to: Give the Official Receiver details of your financial situation, assets and creditors, and take them to the Official Receiver with the appropriate paperwork, for instance bank statements and insurance policies notify your trustee of any income or assets, during your bankruptcy discontinue using bank or building society accounts and credit cards, don’t obtain credit over three hundred pounds without revealing to the creditor that you are bankrupt, do not make payments direct to your creditors. You could also have to go to court and state why you’re in debt.
If you are thinking about making yourself debt management or you are being threatened with bankruptcy, it’s crucial to obtain professional advice.
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