Bankruptcy is a serious matter. You will have to give up any possessions of value and your interest in your home. Bankruptcy will also impose certain restrictions on you. You do not have to become bankrupt just because you are in debt. Contact us and we can advise you on alternatives to bankruptcy which may be more suitable in your situation.
How are you made bankrupt?
A court makes a bankruptcy order only after a bankruptcy petition has been presented. It is usually presented either:by yourself (debtor’s petition);
by one or more creditors who are owed at least £750 by you and that amount is unsecured (creditor’s petition).A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun and seek professional advice. If you dispute the creditor’s claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order has been made is both difficult and expensive.
How do I know if bankruptcy is right for me?
An IVA, or other debt solution, may be more appropriate for your individual circumstances rather than bankruptcy. Please call us first and we will help and advise you.When is an IVA a better debt solution than bankruptcy?Almost always, if an IVA really is an option for you. An IVA helps you avoid all the stigma and serious implications of bankruptcy whilst also taking care of all your debts. Of course you’ll have to keep up your monthly IVA repayments, usually over five years, but these are specifically set at a realistic level you can afford. In an IVA, your assets remain under your control
Will I lose my home if I make myself bankrupt?
If you are a homeowner and have equity in your property, it is likely that you would be made to sell it. This would be needed in order to use the equity towards the debts that you owe. It may be possible to safeguard your home if a family member or friend is willing to buy your share of the property. This allows the equity to be released, but still enables you to stay in your home. If your property is in negative equity, you may be given the opportunity to keep your home.
Will people know I’m bankrupt?
Usually bankruptcy lasts for 12 months, however if you do not co-operate fully with the Official Receiver, the period can be extended. Also, if it is considered that your behaviour or actions contributed to the loss your creditors took, then you could have a restriction order against you for up to 15 years.
How long will my bankruptcy last?
Yes, details of your bankruptcy will be printed in the London Gazette and also in a local newspaper. It is also listed on the bankruptcy register maintained by the Insolvency Service, which is a public document and available on the internet.
Will bankruptcy affect my employment
In certain professions, you risk losing your job. And if you are self-employed, your business will normally be closed down. You can start to trade again but will be subject to restrictions. You will also be barred from being a company director without court permission.
Who would oversee my bankruptcy?
The Official Receiver will act as your trustee in bankruptcy unless an Insolvency Practitioner is appointed. Your Trustee is responsible for looking into all your financial affairs and making a full report to your creditors. He or she may also make a report to court.
How long will bankruptcy affect my credit rating?
It can affect your future ability to obtain facilities from banks, credit card companies and others, and will remain on your credit file for six years. If you apply for credit after that time, you may still have to declare that you have been bankrupt.
What if my circumstances change during bankruptcy?
You are legally bound to inform your bankruptcy trustees if your income increases at all during your bankruptcy. This includes any money left to you in a Will or a redundancy payment.
What do I do after filing my petition for bankruptcy?
The Official Receiver will initially take over once a bankruptcy order has been made and handle all aspects of your bankruptcy, including liaising with your creditors. You will be under a legal obligation to co-operate fully with him or her.
What happens after my bankruptcy is discharged?
You are free to apply for any credit or financial services you choose, although acceptance is not guaranteed. And remember, your bankruptcy will appear on credit searches for at least six years.