Bankruptcy Order – Our Outline

Mar 20th, 2014 | By | Category: Debt

Bankruptcy is a serious issue, but even if you’re already in debt, it does not mean you must declare yourself bankrupt. Bankruptcy is a means of freeing yourself from debts you cannot afford to pay and have no chance of repaying in the near future. It will most surely involve the sale or closure of any business you’re involved in and the disappearance of any major asset you have as a house or other property. There are also future restrictions imposed upon you so alternatives to bankruptcy should be considered first.

Look bankruptcy as a means of dealing with the debts that cannot be paid. The proceedings of the bankruptcy are: one will be freed from the overflowing debts so that they can get a fresh start abiding to certain restriction. Your assets will be divided out reasonably among other creditors.

Bankruptcy Order: More News

By debtors’ petition. If you want to make yourself bankrupt you can contact your local court who’ll give details of the nearest county court dealing with bankruptcy. You can apply for the forms and present them with a deposit and small court fee.

By creditors’ petition. Any Creditor who is owed in excess of $750 can raise a bankruptcy petition against you. They then present the bankruptcy petition at the High Court in London or at the County Court near where you live.

The court will then appoint either an Official Receiver or Insolvency Practitioner who’ll deal with the matter and act as a trustee of your estates. The Official Receiver is a public official of the court who’ll administer the bankruptcy proceedings. He will fully investigate your financial affairs for the period prior to and during your bankruptcy and provide a comprehensive report for your creditors.

Once your bankruptcy has gone through, your file will be overseen by a trustee.  This person is responsible for processing and managing your assets of value to be employed for repaying the creditors. The trustee is either an insolvency practitioner (an authorised debt specialist) or an Official Receiver (a staff member of the bankruptcy court).

An Insolvency Practitioner must be licensed and is often an accountant or solicitor. They are responsible for disposing of your assets and paying off your creditors.

If you own your own home it may be required to be sold and the money raised used to repay creditors. In some cases, however, joint owners may be able to postpone the sale of any property for a considerable time and they should take up-to-date legal advice as soon as possible.

The Trustees will then hold a meeting between yourself and your creditors to decide how much money will be divided out between them.

Firstly it is a criminal offence for a bankrupt to obtain credit of more than $250, either alone or in conjunction with another person, without disclosing the bankruptcy. This likewise applies to hire purchases and rental agreements.

It is also a criminal offence to operate with an existing business in a new name without telling those you do business with there’s a bankruptcy order against you.

Those who’ve been made bankrupt must also not either manage, promote or even start a new business without the court’s permission and nor may they hold certain public office.

New bank or building society accounts can be applied for but not without informing the company of the bankruptcy proceedings. You must inform them you’ve been made bankrupt whilst applying. Your trustees can claim the extra to pay your creditors after that if you’re found to have more money in your account than is absolutely essential for normal living expenses.

You won’t be able to utilize standard bank accounts and all financial institutions that you use will be informed of your bankruptcy. You will also not be in a position to apply for new credit agreements over 500 unless you inform the lender that you’re bankrupt.

Usually the period of bankruptcy is three years, after which you can be discharged (unless you have been bankrupted in the previous 15 years). If, however, you have not been able to properly follow the bankruptcy instructions, the Official Receiver could order any discharge to be postponed. But once discharged, a bankrupt is normally released from most debts at the date of the bankruptcy. Some debts, including those accrued through fraud, criminal activities and fines are exceptions.

Also, once discharged, any assets acquired, before the date of the discharge may continue to be controlled by the trustees and used to pay back outstanding debts. But any assets acquired after the date of the discharge aren’t bound by the terms of the bankruptcy and may be kept.

Finally, it’s possible to be made bankrupt more than once but a second bankruptcy order, after a previous discharge, may have more serious consequences. You may also be prosecuted if you do not disclose any previous bankruptcy, especially if accruing new debts later.


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