Bankruptcy offers the opportunity to make a fresh start in circumstances where
the debts you owe are overwhelming and there is little prospect that you will
ever be able to clear them or make an offer to settle them.
Bankruptcy is sometimes seen as a last resort since it means any significant
assets you may own, such as equity in your home if you are buying it, are
likely to be used to help settle your debts. It also places some restrictions
on your ability to obtain future credit, carry on business and hold certain
public offices.
You can petition for your own Bankruptcy by obtaining the appropriate form from
the Chancery and Bankruptcy Division of the High Court. A fee is payable when
the petition is taken to the Court, currently £310 plus a Court fee of £62. In
certain cases e.g. if you are living only on benefits, the Court fee may be
waived. It is also possible for a creditor to petition for your Bankruptcy if
you owe the creditor more than £750 but it is rare for this to happen in normal
consumer debt cases.
The Official Receiver is the Court officer who handles the administration of
your Bankruptcy. The Official Receiver will agree what is to happen to any
assets you may have and, in cases where you have sufficient income to make
regular payments, how much the payments should be and how long they will be
made for. After a Bankruptcy order is made he/she will inform your creditors.
Creditors can then take no further action against you.
You are normally "discharged" from your Bankruptcy after one year.
You will continue to pay into your bankruptcy for 2 years if you file your own
bankruptcy and owe less than £20,000.
You will continue to pay into your bankruptcy for 3 years if someone else
makes you bankrupt or you owe more than £20,000.
Longer periods may apply if this is not your first bankruptcy or you have a
large surplus income to pay into your bankruptcy.
No. In most instances your household goods will not be taken. Exceptions would
be antiques, for example, an antique table and chairs could be sold and you
would be given money to buy more basic replacements. If you own a car, the
Official Receiver will take into account its value and whether it is essential
to you before deciding whether to remove or sell it. The tools of your trade
are normally exempt.
Your Bankruptcy will be reported in the local paper and the Stubbs Gazette. The
Official Receiver will contact your creditors.
This will depend on your job. Consult your union / personnel department /
pension scheme administrator for advice.
