Bankruptcy is an option that often has to be considered when you cannot pay your debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order.
Bankruptcy is one way of dealing with debts you cannot pay. The bankruptcy proceedings:-
free you from overwhelming debts so you can make a fresh start, subject to some restrictions
make sure your assets are shared out fairly among your creditors.
Although bankruptcy has a bad stigma and is publicly advertised, it should always be considered when dealing with individual insolvency cases. However bankruptcy is just one of several options to be considered when you cannot repay your debts. If you are ever faced with the prospect of bankruptcy you should always look at alternatives as soon as possible such as an Individual Voluntary Arrangement or a Financial Management Plan.
You can be made bankrupt either in one of three ways.
Voluntary Bankruptcy - you apply to become bankrupt yourself.
Involuntarily Bankruptcy - A creditor you owe money (£5000 Minimum) applies for your bankruptcy
The supervisor or anyone bound by an IVA
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. 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 is made is both difficult and expensive.
What are the implications of bankruptcy?
You lose control of your assets.
You cannot obtain credit for over £500 without the permission from the lender.
You cannot act as a company director.
You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
You may not practice as a Charted Accountant / Lawyer.
You may not act as a Justice of the peace (JP).
You may not become an member of parliament.
You may not become a member of the local authority.
Your credit is affected for many years after the annulment.
You may be publicly examined in court.
What are the advantages of bankruptcy?
For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year (or less in some cases).
For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out.
There are many long term disadvantages associated with Bankruptcy which need to be considered before you make your final decision.
We're here to help
Please explore the website, as it contains a wealth of information that will reduce your stress and anxiety. There is lots of information explaining the bankruptcy process and the effects it may have on you personally, such as your home and your job. Their are also guides on dealing with council tax debts, bailiffs and Inland Revenue debts, to simply reducing your outgoings.
Our panel of specialists can quickly advise you of your options if you are considering going bankrupt. Simply call the team on 0800 088 2208. Alternatively take the online bankruptcy test and find your best solution.
I Contacted them at 5 pm on a Thursday night,they arranged a meeting Friday morning with all the relevant bodies their because my case was the following Monday .I can't sing their praises high enough they contacted the courts same afternoon. Fantastic response, I avoided bankruptcy on the Monday and was given time to arrange an Iva. I risked losing my home,my mother and fathers home all hope seemed lost until I made that fateful phone call. I can now sleep at night.
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