In UK, declaring bankruptcy was considered to be something that was done by irresponsible people. It was like a stigma that one had to carry throughout their lives. However, in today's world, with rising food and fuel costs and reduced buying power of the British Pound, at times bankruptcy may be the logical solution.
If it was a perfect world, you could enter into an Individual Voluntary Arrangement and pay your debts in five years. However, we don't live in a perfect world and creditors don't want to let you off the hook. They may agree on monthly payments that may take decades to pay and yet the loan may not be fully repaid. One way of working off debts is by declaring bankruptcy. Once bankruptcy is declared, the creditors cannot harass you. Alternatively, make you enter an agreement that will leave you stuck paying of loans forever.
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A creditor whom you owe more than seven hundred and fifty pounds can or you yourself can file for bankruptcy in a local court. There is a hundred and twenty pound court fee. However, if you are on an income support program the court can waive the fee. You will have to pay two hundred and fifty pounds to the court for administrating your bankruptcy. You will need your own lawyer to plead your case.
After the hearing, the court may issue a stay order. This means the court needs more time to examine the case. The court may dismiss the petition because an administration order will be more appropriate. The court may appoint an insolvency practitioner. This can happen if your assets are more than two thousand pounds and unsecured debts less than twenty thousand pounds. The court can issue a bankruptcy order.
You are declared bankrupt as soon as the court declares it. The court may also issue a certificate of administration if your debts are less than twenty thousand pounds and you have not been bankrupt or filed individual voluntary arrangement in the last 5 years. This makes the administration of your bankruptcy quicker and simpler.
The official receiver becomes your trustee, and you are discharged from the bankruptcy after two years of the date of the order. In case a summary of administration is not made, the bankruptcy order will be discharged after three years.
After bankruptcy, all your assets are handed over to the trustee. You cannot deal with your bank or take any loan without informing the trustee. You cannot make any direct payments to your creditors. You cannot form, own or manage a company without informing the court. You cannot hold certain public offices.
After you are discharged from your bankruptcy, you can resume your financial activities without informing the trustee. Your credit rating will be rebuilt after six years. You will go through this process after bankruptcy. However, it may be a more suitable option as you can start with a clean slate. The court can also discharge your bankruptcy after a year.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
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