If you are struggling with personal debts, bankruptcy might be a viable option to help you back on the path to a debt-free future. Although the term ‘bankruptcy’ carries an element of stigma, for many people it is the best way forward for their given circumstances and more appropriate than an IVA or debt management plan.
So what is bankruptcy? It is a court-based procedure and you can either choose to become bankrupt or it can be enforced against you if you cannot pay your debts. Your assets will be placed in the hands of an officially appointed Trustee (who has extensive powers of investigation) who will take steps to turn your assets into money, which can then be used to pay off creditors.
Bankruptcy can be a very clear and straightforward way of resolving your financial affairs – especially when you consider that, in the majority of cases, liabilities are extinguished on discharge after 12 months or sooner, unless the Trustee suspends your discharge due to your non-cooperation.
You can voluntarily opt for a ‘debtor’s petition’ if you feel that there is no prospect of repaying your debts. Alternatively a ‘creditor’s petition’ can be forced on you by someone who is owed more than £5,000. This lower limit has recently increased from £750.
As a bankrupt individual, you have a duty to assist the Trustee in enquiries relating to your financial conduct before the bankruptcy. Begbies Traynor can be appointed as Trustee, and we will act in the very best interests of all parties. A Trustee has three years from the date of the Bankruptcy Order to realise any interest in the property in which you reside. If you have surplus income each month, you could be liable to make payments for a period of three years.
If appropriate, the Official Receiver can obtain a Bankruptcy Restriction Order or Undertaking which can last from 2-15 years. The order essentially means that you will be subject to the restrictions of Bankruptcy for the duration of the Order.
Through a free, confidential consultation at your convenience, we can quickly ascertain whether bankruptcy will be the right option for you given your personal circumstances. If we think that bankruptcy is the best route forward, our specialist personal insolvency team will support you every step of the way.
If you’re a partner in a partnership that cannot be salvaged, you can declare yourself Bankrupt. The partnership is automatically dissolved and any remaining partners can carry on the business with a view to concluding its affairs.
We hope that you will be satisfied with the service that we provide, but we recognise that there may be occasions where you will not be satisfied with the way in which the matter has been dealt with. In those circumstances please refer to our Complaints Procedure.