Summary
Bankruptcy is not very pleasant but if you’re facing it, it is better to know what to expect. This article gives helpful information on how to cope with this situation
If you have serious debt you might be contemplating bankruptcy. It is imperative to realise what bankruptcy implies and whether it is the right wayfor you.
Bankruptcy what is it? Bankruptcy is a intrim legal position. When bankrupt, your non-essential assets for example possessions, property including excess income are used to pay the debts you owe. After the bankruptcy period has ended, most debts are discharged. This can be an effective system of removing debts destroyer you can’t pay.
How long does bankruptcy last?. Bankruptcy as a rule lasts for one year. After this time, you’ll be ‘discharged’ from your bankruptcy in spite of however much you still owe. You may be discharged earlier if you have co-operated fully with the Official Receiver. Still, in a marginal number of cases and if you’ve conducted yourself irresponsibly, bankruptcy can remain for much longer than a year.
How do you become bankrupt? A court declares you bankrupt by issuing a ‘bankruptcy order’ after it has been supplied with a ‘bankruptcy petition’. By and large this happens in 1 of 2 ways.
1st , you can apply for your own bankruptcy. A debtor’s petition form can be can be downloaded off the computer from the Insolvency Service website or aquired from county courts with bankruptcy jurisdiction. The form should be filled in and then taken to your nearest county court, that has bankruptcy jurisdiction. A fee of one hundred and fifty pounds and deposit of three hundred and sixty pounds is payable at this time. This amount cannot be waived.
A creditor making you bankrupt. Your creditors can serve a creditor’s petition if you have an unsecured debt of more than eight hundred pounds. Once bankruptcy proceedings have started, you have to co-operate wholly even though it is a creditor’s petition and you question their claim.
From where do bankruptcy orders come from? Bankruptcy petitions are normally presented in a county pertinent court near where you reside or trade.
Who would sort out your bankruptcy? After a bankruptcy order has been made against you, your creditors can no longer pursue you for payment. Payment of these bills becomes the duty of the trustee. An Official Receiver is appointed if you have no assets. If you are in possession of assets, an Insolvency Practitioner will be selected to function as trustee and sell your assets to pay your creditors.
What occurs when you are bankrupt?. As soon as you are bankrupt, the Official Receiver, or agreed trustee, can sell your assets to pay your creditors. However, specific goods aren’t classed as assets for this purpose, for example: required work equipment and tools and necessary household items such as bedding, furniture and clothing.
The Official Receiver assess your income taking into account expenses and decide if payments should be made to your creditors. You will possibly be asked to sign an ‘income payments agreement’ to pay set monthly payments from your income for 3 years.
Your obligations when you’re bankrupt. You have a responsibility to: Give the Official Receiver details of your finances, creditors and assets, and take them to the Official Receiver with the appropriate paperwork, such as bank statements and insurance policies notify your trustee of any income or assets, during your bankruptcy discontinue using credit cards and bank or building society accounts, not apply for credit over 400 pounds without informing the creditor that you’re bankrupt, not 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 considering making yourself debt advice or you are being threatened with bankruptcy, it’s imperative to seek independent financial advice.
