Summary
Bankruptcy is not very pleasant but if you’re having to face it, it’s best to know the system. This article explains
If you have serious debt solutions you could be thinking about bankruptcy. It’s imperative to understand what bankruptcy entails and whether it is the right solutionfor you.
What does bankruptcy mean? Bankruptcy is a transitory legal condition. As soon as you are bankrupt, your non-essential assets like property and possessions including excess income are used to pay the money owed to your creditors. After the bankruptcy period has ended, most debts are discharged. This may be an effective way of discharging online debt that you might never be able to pay.
How long does bankruptcy last?. Bankruptcy generally lasts for 1 year. After this, you’ll be ‘discharged’ from your bankruptcy regardless of the money you still owe. You may be discharged earlier if you have co-operated fully with the Official Receiver. Although, in a few cases and if you’ve conducted yourself negligently, bankruptcy can last for much longer than one year.
How to become a bankrupt? A court pronounces you bankrupt by issuing a ‘bankruptcy order’ after it’s been presented with a ‘bankruptcy petition’. On the whole this happens in 1 of 2 ways.
Firstly by filing your own bankruptcy petition. A debtor’s petition form can be downloaded from the I S website or obtained from county courts with bankruptcy jurisdiction. The completed form should be, then taken to the nearest county court, that has bankruptcy jurisdiction. A fee of 150 pounds and deposit of three hundred and sixty pounds is payable at this time. This cost cannot be ignored.
What happens when a creditor makes you bankrupt?. Your creditors can serve a creditor’s petition if you owe them an unsecured debt over seven hundred pounds. Once bankruptcy proceedings have started, you are obliged to co-operate totally even if it is a creditor’s petition and you query their claim.
From where do bankruptcy orders come from? Bankruptcy petitions are generally put forward in a county related court near where you reside or trade.
Who would sort out your bankruptcy? As soon as a bankruptcy order has been filed against you, the people you owe money to can no longer hunt you for payment. Payment of the money owed becomes the task of the trustee. An Official Receiver is appointed if you have no assets. If you do have assets, an Insolvency Practitioner will be selected to work as trustee and sell your assets to pay off your creditors.
What occurs when you are bankrupt?. After you are bankrupt, the Official Receiver, or appointed trustee, can sell your assets on your behalf to pay your creditors. Though, selected goods aren’t classed as assets for this purpose, for example: required household goods such as furniture, bedding, clothing and tools and equipment needed for work.
The Official Receiver make an assessment of your income taking into account expenses and work out if payments can or should be made to your creditors. You may be required to sign an ‘income payments agreement’ to pay fixed monthly instalments from your income for two years.
What are your responsibilities when you are bankrupt?. You have a responsibility to: Give the Official Receiver information about your finances, assets and creditors, and hand them over to the Official Receiver with the relatable paperwork, such as bank statements and insurance policies tell your trustee about any income or assets, for the duration of your bankruptcy discontinue using credit cards and bank or building society accounts, do not apply for credit over £300 without informing the creditor that you are bankrupt, don’t make payments straight to your creditors. It is likely that you willYou might also have to go to court and state why you’re in debt.
If you are deliberating making yourself iva advice or you’re being threatened with bankruptcy, it is important to obtain independent advice.