Do you know that almost 2/3 individuals are going bankrupt in Britain under the age of 30? More shockingly, the number is rising very fast. If you are on the verge of a bankruptcy don’t panic, you are not alone. Take it as a new beginning. However, we will recommend you to take bankruptcy as your last option.
We will also recommend you to read the following articles:
1. IVA or Bankruptcy – Which one is a better alternative?
2. Step by Step guide to IVA – How to get an IVA
This article will help you get a clear picture about how bankruptcies are made.
Bankruptcy Procedure
Bankruptcies are either dealt in the county court or at the High Court in London. A bankruptcy petition can be made either by the debtor himself or by the creditors (if the unsecured debt amount is more than £750). However, if you want to file a bankruptcy, you will have to contact the nearest county court. The will inform you about the appropriate county court where your petition will be accepted.
The court will determine the validity of the petition and make an order for bankruptcy accordingly. The court will also appoint an Official Receiver who will be in control of debtor’s property.
The debtor must submit his or her Statement of Affairs to the Official Receiver within 21 days. Depending on the debtor’s Statement of Affairs, the Official Receiver will determine whether a creditor’s meeting is necessary or not. The creditors may also request for a meeting.
A bankruptcy petition can also be made when you are not present in the country. Such a situation only arises when you have left the country or have gone out in some business and your creditors want to file bankruptcy against you.
Filing for bankruptcy will cost you £150 as court fee. Another £345 has to be paid to the Official Receiver who will supervise and administer your bankruptcy. Sometimes these fees are waived if the debtor meets certain criteria.
Most your assets and valuables will be sold to pay off the creditors. The remaining debt will be written off by the court order. To add, a bankruptcy affects you credit scores to a high extent but it also focuses on a new beginning. At present it takes 1 year to get discharged from bankruptcy.
You may also like to know about the following people:
The Official Receiver
To make yourself bankrupt you need an Official Receiver (a civil officer in the Insolvency services). He will be responsible for protecting your assets and administering the bankruptcy properly from the date, the bankruptcy order is approved by the court. If you are not appointing an Insolvency Practitioner, the Official Receiver acts as a trustee to the bankruptcy estate.
The Official Receiver reviews if the debtor’s finances are in place at the time of the order. He is also responsible for reporting to the creditors as well as the court about the debtor’s financial status. He will report any criminal offence in connection to the bankruptcy to the court.
The Insolvency Practitioners
Insolvency Practitioners are specialists in insolvency cases. Primarily they act on behalf of the debtor and after the order is passed they become trustees and report to the creditors.
Majority of bankruptcy proceedings are done in the High Court of London. But if someone is living outside London he or she may file the bankruptcy in an appropriate county court which will be supervised by an Official Receiver. The bankruptcy order is published and advertised in the London Gazette.
I was staying in UK for a long time but i had moved recently to anothr country not of EU. Noew i am worried as to whether debt agencies will chase me to this country. So I am thinking of moving back to UK go for bankruptcy for managing my debts. What should i do?
Well, if you haven’t given your address details or your whereabouts to the debt agency then it would not be possible for them to chase you. If you don’t use the same bank or credit cards, they will not be able to trace you so easily. But one problem is that if you delay in paying your debts, they will pile up to a huge amount so much that you would not have no other option other than getting bankrupt. So you must try to get an IVA in order to write off your debts as fast as you can. The more you delay, the more you will have to pay.
Thank you for your summary. Your well written presentation is appreciated. Keep up the good work.