Bankruptcy

Bankruptcy should be seen as the last resort after having pursued every other possibility. If you petition for bankruptcy then you will need to fill out two forms, one is a request to the court for you to be declared bankrupt, and the second is the statement of affairs which lists all your assets these can include houses cars and savings accounts, anything that could be released to help pay your debts. Also on the statement of affairs you will be required to list all of your debts and the name of the creditors. These forms differ depending on whether you were involved in the running of a business or not. It is important that these documents are completed accurately as they will form part of the investigation into your financial affairs.

Before completing these forms and petitioning for your bankruptcy it is advisably that you seek some advice, so that you are aware of how this will affect any assets that you have and what your duties are towards the courts. The court staff can advise you on court procedure and answer any questions you may have about filling out the forms, but they can not give you any financial advice.

Organisations you can contact for advice includes any financial advisors, the Consumer Credit Counselling service (CCCS) and the Citizens’ advice bureau. These organisations can give you advice and direct you to your nearest court as not all courts deal with bankruptcy cases.

Once the relevant forms have been completed you will also have to pay for your Bankruptcy order. The standard court fee of £130.00 and in most cases you will need to pay a deposit to the Official receivers office that will be administrating your affairs whilst you are in bankruptcy.

Once you have been declared bankrupt the official receiver will handle you affairs, they will make contact with your creditors and will inform them of how much they will be paid. After having looked at your statement of affairs they will inform you of how much you will have to repay each month. This is normally worked out as a percentage of your disposable income, versus how much you owe.

Whilst you are in bankruptcy you have certain specific duties that must be followed, these include:

• Provide information about your financial affairs to the official receiver.
• Hand over any bank statements and financial records to the official receiver.
• Tell your trustee in bankruptcy about any assets and increases in salary that you may obtain during the bankruptcy period.
• Stop using your bank account, credit cards and similar accounts straight away.
• Not get credit of £500 or more from any one with out first telling them that you have been declared bankrupt.
• Not making any payments direct to your creditors, any correspondence should be sent to the official receiver.

Failure to comply with any of the following could result in your arrest. Normally you will be freed from bankruptcy after a period of 12 months; this can be sooner depending on individual cases.