Bankruptcy Discharge Order – freedom from bankruptcy restrictions

In our last post, we discussed about FTVA as a bankruptcy alternative. There is another procedure that can free you from the restrictions of bankruptcy and debts you owed while getting bankrupt. It is called “bankruptcy discharge order”.

When can I get discharged from bankruptcy?

You get discharged usually after completing one year of bankruptcy order. However if the Official Receiver files a notice in the court before one year gets over, then you can be discharged earlier. You will get a notice regarding the time of your discharge. You need to co-operate with the Official Receiver otherwise, your discharge order may be ceased.

How do I get discharged?

You do not have to apply to get a discharge order granted. You get your discharge automatically. Once you wish to own a Discharge Certificate, you will have to write to the court which was dealing with your bankruptcy proceedings. A Discharge Certificate is a proof that you have been released from bankruptcy. You must maintain a time gap of at least two weeks prior to your discharge date when writing to the court. Make sure you have included details such as name, address as well as your court number (to be obtained from the latest correspondence about your bankruptcy). For getting a Certificate of Discharge, you need to pay a fee of £60. If you want more copies of this certificate, it will cost you £5 each. You can also advertise your discharge order for additional cost and for this you need to ask the Official Receiver.

There are two situations when you cannot get your discharge automatically:

1. When your discharge period has been suspended. It may happen if you fail to co-operate with the Official Receiver or trustee;
2. When you are subjected to a criminal bankruptcy order.

You can always consult the Official Receiver for more help and information on your specific situation.

Can I get an early discharge from bankruptcy?

No, you cannot automatically get an early discharge order from bankruptcy.  The Official Receiver reviews your file for 3 months once reports are sent out to your creditors. After 8 weeks of the bankruptcy order, this report is issued. Once the Official Receiver is convinced that your bankruptcy does not require further investigation, early discharge process can begin. For this you need to respond to the queries of the Official Receiver quickly. This early discharge process takes place only when your creditors raise no objection to this order. The process of early discharge takes 6 months to be executed.

What are the after effects of “Bankruptcy Discharge Order”?

• Once you are discharged from a bankruptcy order, you will be freed from your debt burden. You will never have to mention about your bankruptcy while obtaining credit. There are some debts that are not included in the discharge order such as money owed under family proceedings, personal injury, court fines, debts related to frauds, debts owed after the bankruptcy order and student loan debts.
• When it comes to mortgage payments, remember that your secured creditors can pursue you for recovering the debts. You must negotiate with your mortgage lenders regarding your payments.
• Even if you are discharged from bankruptcy, your assets that are held by the Official Receiver or the trustee are not returned to you. Assets like home are dealt with after your discharge. In case your home has not been dealt with for 3 years since the date of the bankruptcy order, the interest might be returned to you.
• Regarding payments under an income payments order or agreement, you must continue with them even after you are discharged.
• Once you are discharged from bankruptcy, you can carry out your business without the restrictions imposed during bankruptcy.
• After you are discharged, you must co-operate with the Official Receiver and trustee if they require any information from you. Any breach of this rule will result in a contempt of court.
• Record of your bankruptcy will remain in the Insolvency Register for 3 months after your discharge.
• As for credit reference agencies, they pick up information from advertisements of bankruptcies in newspapers like “The London Gazette” and the Register of County Court Judgments. If there is no advertisement, you will have to inform the credit reference agencies to make changes in their records. For more information, a leaflet called ‘Credit Explained’ is produced by the Information Commissioner’s Office.

More information and help:

By telephone: 0845 015 0010.

By email: publications@berr.gsi.gov.uk

By fax: 0845 015 0020

You can also write to:

The Insolvency Service Publications Orders
Records Management
4th Floor East
Ladywood House
Birmingham
B2 4U

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