Bankruptcy Advice

Advice and Help With Bankruptcy Problems

Bankruptcy is a formal procedure used to deal with the affairs of individuals whose liabilities, exceed their assets or they are unable to pay the debts as they fall due.  The ("Bankruptcy order") is made by the courts and can be obtained by any creditor owed and holding an unsatisfied judgement for an amount in excess of £750 or by the individual concerned, applying to court.

If a Bankruptcy order is made against you, your affairs will be dealt by a trustee in Bankruptcy and, subject to certain exemptions, your assets will be sold to pay your creditors.  Assets which you should be allowed to retain include:

• Furniture, bedding, clothing and household equipment for basic domestic needs
• Items you require to continue a trade
• A modest car or van
• Money in a pension fund

The trustee would, therefore, seek to sell your home or at least realise your interest in it, provided its value was in excess of any mortgages on the property.  He would also seek to realise any shares, investments, antiques and bank or building society accounts. He will also seek to recover any payments made preferentially to certain creditors and any assets that have been transferred at an undervalue.

How long does bankruptcy last?

Unless you have previously been bankrupt, your Bankruptcy will usually last no more than 12 months but you will be subject to a number of restrictions during this time.  Your trustee will also advertise details of your Bankruptcy in a local paper and inform a variety of interested parties of your Bankruptcy.

Any assets you receive whilst bankrupt, such as a lottery win or inheritance, will be used to pay your creditors and, if you have any surplus income, you will be expected to make payments to your creditors for up to 3 years from the date of the Bankruptcy order.

Bankruptcy does nevertheless offer the opportunity of a fresh start as, in most cases, it prevents your creditors making any further claims against you.

Read more to find out what the best option is for you: bankruptcy or an IVA?

Call us on 0800 88 18 274 to find out how we can help at the Debt Help line