The Bankruptcy Process
How to go bankrupt
The bankruptcy process starts with filling out a Bankruptcy Petition referred to as the Debtor’s Petition. This process requires you to contact your local court, which will give you information on your nearest county court that deals with bankruptcy hearings. If you are forced to go bankrupt by your creditors, however, they fill out the petition which is referred to as the Creditor’s Petition, but it is important to know that this only happens if you owe them more than £750. You should also be aware that filing a bankruptcy petition does not prevent your creditors from contacting you or trying to sue you.
An Insolvency Practitioner is appointed as the Official Receiver (civil servant and officer of the court) when your petition has been filed. This person will go through a fact finding and diligence process with you. This includes attending meetings with the practitioner to provide information on numerous factors such as who you owe money to, what you earn, your general household spending and any other information.
You have to attend the Bankruptcy Hearing once a date is set with your Official Receiver. The Magistrate will review all the information provided by the Official Receiver and judge whether a Bankruptcy Order is to be issued. Not all hearings in a petition are granted and are sometimes dismissed if an administration order is more appropriate. There may also be a delay to seek further information on your situation. The hearing may also result in the appointment of an Insolvency Practitioner to set up an Individual Voluntary Arrangement instead.
In the result of a Bankruptcy Order a bankruptcy period of 36 months can be reduced to 12 months. You will then sell your assets to raise sums of money as well as contributions from your income each month.
When you become officially bankrupt it is published in the local newspaper and is recorded on the Insolvency Register and the Credit Reference Agencies. Your landlord is also notified if you are a tenant.
A quick guide to bankruptcy
Bankruptcy is a tough experience. When someone is made bankrupt, their possessions, home, income, in fact all their assets are used to pay their outstanding debts.
Bankruptcy solicitors
Facing bankruptcy can be a frightening experience. There are many complications involved that may leave you feeling confused and not knowing where to turn. Having a solicitor to guide you through the process can bear huge benefits.
Living with bankruptcy
Bankruptcy is the legal status that a person or organisation enters into when it can no longer pay its debts and honour its obligations to its creditors.