Bankruptcy
Bankruptcy is a court-based procedure – and you can 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 £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.
