Bankruptcy FAQ / Guides
Bankruptcy is a legal procedure that an individual can use to have 100% of
their debt written off using the local courts and is one way of dealing with
debts you cannot pay.
Bankruptcy will:
- Free you from overwhelming debts
- Stop all letters and further action from creditors including CCJ’s and
Bailiff action
- Automatic discharge in 12 months
You should always seek professional advice on bankruptcy as the courts and
official receivers office will not give you insolvency advice.
This may be the solution for you if:
- You are struggling to pay your debts
- You owe more than £750.00
- You have tried to setup payment plans and your creditors are still
hassling you
- Your IVA plan has failed
You cannot include student loans, child support arrears and secured
credit or court fines.
How do I go Bankrupt?
- Submit a 35 page Statement of affairs to court
- Swear an affidavit to the contents
- Official receiver will manage the bankruptcy
- Official receiver has 12 weeks to decide on whether a meeting of
creditors is to be summoned and a trustee appointed
What happens next?
- Official receiver will decide upon Bankruptcy restrictions and
undertakings (BRO/BRU)
- Once the bankruptcy order is made all assets will vest in the trustee
- The trustee cannot claim items such as household effects and tools
required for work. Vehicles and property are subject to valuations.
Your
car and home are not automatically taken as assets unless they can be
reasonably replaced.
- Part of the wages can be paid to the trustee if there is a sufficient
disposable income available.
- The trustee will have 3 years to decide how to deal with any equity in
your property and you may remain in the property
What you cannot do
- Credit in excess of £500 cannot be taken without the bankrupt advising his
potential creditor of his bankrupt status.
- The bankrupt must not act as a director or be involved in the management
of a company without leave of the Court.
We can offer expert advice on
- The Bankruptcy process and how it will affect you
- Period of your bankruptcy
- BRO and BRU
- Amount of any potential income payments orders
- Prepare your statement of affairs
- Book your court hearing
There is a fee payable to the court and for our work and advice. This will
be determined by your circumstances i.e. advice given to someone that is self
employed will differ to a homeowner.