The aim of Public Advice is to offer help and guidance in answering your questions and explain how to apply for the process your self.
Here is some information which may help answer your questions briefly right now.
Bankruptcy should never be taken lightly. When you are made bankrupt, your assets (possessions, home, income etc) can be used to pay your debts. You have to agree to certain restrictions and your financial affairs will be investigated.
Bankruptcy is one way of dealing with debts you can't pay. Your assets can be used to pay your creditors (people you owe money to). You are subject to certain restrictions and discharged (freed) from your debts after a period of time.
Anyone can apply to the court to make themselves bankrupt, including individuals, sole traders and members of a partnership. There are different procedures for companies and partnerships.
Only the court can make you bankrupt, and not all courts deal with bankruptcy cases. You can make yourself bankrupt by petitioning (applying to) the court. Your creditors can usually petition the court if you owe them at least £750. You are bankrupt when the court issues a bankruptcy order against you.
There are fees and procedures you have to follow - these are different in Scotland and Northern Ireland
You have to hand over any assets of value and the financial interest in your home to a person appointed to manage your bankruptcy called a 'trustee'.
Your trustee will be either an Official Receiver (an officer of the bankruptcy court) or an insolvency practitioner (an authorised debt specialist).
It takes time to appoint a trustee, so the Official Receiver manages your bankruptcy at first. They'll collect information on your finances and protect your assets for your creditors.
If you have significant assets, it is likely the Official Receiver will ask your creditors to appoint an insolvency practitioner as trustee. If you don't have significant assets the Official Receiver will act as trustee.
Bankruptcy usually involves the closure of any business you run and the dismissal of your employees. It can affect your working situation if being made bankrupt is not allowed in your contract of employment. For example, you can't have a job as a solicitor, trustee of a charity or a role regulated by the Financial Services Authority.
You will have to give up any assets of value and may lose the financial interest in your home. Any spare income you have can be used to help pay your bankruptcy debts.
It will affect your ability to get credit (for example, a mortgage) as credit reference agencies keep a record of your bankruptcy for six years. Your bank will freeze any accounts you hold and may not let you open new ones.
Bankruptcy usually lasts 12 months and after this time you are discharged (freed) from your bankruptcy debts. It can be earlier if the Official Receiver completes their work on your bankruptcy and your creditors don't object.
Your discharge can be delayed if you break the bankruptcy restrictions or don't co-operate with the Official Receiver.
Even after your discharge:
assets taken to pay your debts will not be returned to you
your income can be used for three years to help pay your bankruptcy debts, if you can afford it
the bankruptcy restrictions can continue for up to 15 years - for example, if your bankruptcy was the result of careless, criminal or dishonest behaviour (like fraud)
This extension is known as either a Bankruptcy Restrictions Order or Bankruptcy Restrictions Undertaking.
If your debts have brought you to the point where you think you may have to apply for bankruptcy, then it's vital you get the right advice. For example, an IVA, or another debt solution, may still be an alternative to bankruptcy declaration.
We hope this small amount of Bankruptcy advice information has helped you understand briefly the Bankruptcy process.
It is advisable that if you require a solicitor to represent you then you use the larger solicitor firms to represent you. The reason is - They have the right staff who have many years of experience between them to allow you to receive the best advice. However, this is not always possible for many due to the costs of the larger firms. At Public Advice we have linked up with various larger firms who will offer their advice at reduced costs based on the volumes of business we provide to them.
For more information please call us on 01923 85 42 02
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