How long does it take to build your credit rating back up after going bankrupt too and if i have a pension plan what will happen with it?
Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. A first time bankrupt with debts will generally receive their discharge one year after the date of the bankruptcy order (there is the possibility that in some cases the bankruptcy discharge period will be less than one year).
Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home.
If you live with a partner and/or children then a period of twelve months may be allowed for other living arrangements to be made. At the end of the twelve-month period, the property will almost certainly have to be put up for sale, enforced by a Court order if necessary. If you own the property with someone else they may be able to make an offer to buy out your interest in the property from the Official Receiver.
The other main disadvantages of bankruptcy are the restrictions placed upon you and the stigma of having to declare oneself as a bankrupt for certain transactions.
A bankrupt may open a new bank or building society account but should disclose the fact that they are bankrupt. The bank or building society may then impose conditions and limitations. Overdraft facilities or chequebooks must not be obtained, as they are likely to be dishonoured. The bankrupt must inform the Trustee of any funds available in the account, which exceed the normal living expenses, in order for the Trustee to distribute among the creditors. A bankrupt may open a new bank or building society account but should disclose the fact that they are bankrupt. The bank or building society may then impose conditions and limitations. Overdraft facilities or chequebooks must not be obtained, as they are likely to be dishonoured. The bankrupt must inform the Trustee of any funds available in the account, which exceed the normal living expenses, in order for the Trustee to distribute among the creditors.
Part or all of your pension may be claimed by your trustee in bankruptcy, whether you are receiving it now or it is due in the future.
There are basically four types of pension that you may have already, or could be entitled to receive in the future.
State pension – This will include any payment from the State Earning Related Pension Scheme – SERPS.
Occupational pension – This is a scheme set up by an employer to provide members with retirement and death benefits. Contributions may have been made by the employer, you as an employee, or both.
Personal pension – This is a personal pension policy you have taken out with an insurance company to pay you benefits in later life. (Retirement annuity contracts are similar to personal pension plans. If you have a retirement annuity contract, it will be treated in your bankruptcy in a similar way to a personal pension plan.)
Group personal pension – This is a personal pension policy taken out with a pension provider and often your employer or trade association will have negotiated favourable rates and terms. Following a bankruptcy order, a group personal pension is dealt with in the same way as a personal pension.
You may have more than one type of pension and you may have several pensions of the same type. For example, you may have occupational pensions from your present and previous employers
Whether or not you are currently receiving your pension, the trustee cannot claim: your state pension or any payments from the State Earnings Related Pension Scheme (SERPS);
any of your occupational pension if your occupational scheme has a clause forfeiting pension benefits following bankruptcy (the trustee could claim the benefit of a personal pension policy, even if it has a similar clause); and
any protected rights – these rights arise in any pension you may have where you or your employer have contracted out of SERPS. They represent the equivalent of the SERPS benefits within your pension. In an occupational pension scheme, the protected rights might be known as ‘a guaranteed minimum pension’ or ‘benefits under the reference scheme test’.
When he or she has all the information about your pension, the official receiver or your trustee will be able to tell you what part, if any, of your pension is being claimed as an asset in your bankruptcy. Even if the trustee cannot claim your pension, or any part of it, the amounts you receive may still be included in the calculation of your income, if the trustee applies to the court for an income payments order’ during your bankruptcy. (The court may order you to pay part of your wages, salary or other income to the trustee.)
If your trustee can claim your benefits under an occupational pension scheme or personal pension, this will include any lump sum that is payable as well as the regular payments you are entitled to receive.
Pension rights and benefits cannot be assigned (transferred). However, your trustee in bankruptcy may consider giving up his interest in the pension, which would mean that the benefits would come to you when they become payable. A relative or friend of yours would have to be willing to provide a suitable sum of money, based upon the current transfer value of your pension fund (excluding protected rights), before your trustee is likely to agree to this option. This is something you should discuss with your trustee so that you have all the relevant facts about your position and that of the person providing the money
Pension contributions can continue under your existing pension arrangements or under new pension arrangements made after the bankruptcy order. But it may not be in your interest to continue to make payments, particularly to a personal pension, because you may not receive the full benefit of them. You should seek advice from your pension provider or an independent financial adviser before making any payments
Any part of your pension that is claimed by your trustee will be collected by him when you reach the retirement age under your pension arrangements, even if this is after your discharge from bankruptcy
The bad consequences are:
You lose control of your assets.
You cannot obtain credit for over £250 without the permission from the lender.
You cannot act as a company director.
You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
You may not practice as a Charted Accountant / Lawyer.
You may not act as a Justice of the peace (JP).
You may not become an member of parliament.
You may not become a member of the local authority.
Your credit is affected for many years after the annulment.
You may be publicly examined in court
Although whether it is considered 'bad' that you are prevented from being an accountant or lawyer could be a moot point 
On the positive side:
For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year (or less in some cases).
For the creditors, bankruptcy allows a full investigation of the debtor's affairs to be carried out
A bankrupt may be discharged (freed from obligations under the bankruptcy order) after one year.
Discharge is not necessarily automatic and can be postponed by the Court. In addition, the discharge may not necessarily free that person from certain all liabilities and does not mean that unrealised assets will be safeguarded.
Discharge releases the bankrupt from most of the debts owed at the date of the bankruptcy order. Exceptions include debts arising from fraud, certain crimes and fines. Certain other debts such as damages or personal injury or money owed under family proceedings (such as maintenance) will be released only if the Court agrees.
If you have been declared bankrupt before, within the last 15 years, you will not be automatically discharged. You will only be able to apply to the Court for a discharge 5 years after the date of your current A bankrupt may be discharged (freed from obligations under the bankruptcy order) after one year.
Discharge is not necessarily automatic and can be postponed by the Court. In addition, the discharge may not necessarily free that person from certain all liabilities and does not mean that unrealised assets will be safeguarded.
Discharge releases the bankrupt from most of the debts owed at the date of the bankruptcy order. Exceptions include debts arising from fraud, certain crimes and fines. Certain other debts such as damages or personal injury or money owed under family proceedings (such as maintenance) will be released only if the Court agrees.
If you have been declared bankrupt before, within the last 15 years, you will not be automatically discharged. You will only be able to apply to the Court for a discharge 5 years after the date of your current bankruptcy order.
When discharged there may still be assets that were owned either when the bankruptcy began or which were acquired before discharge, which the Trustee has not yet dealt with. These may include property, an insurance or pension policy, an interest in a will or trust fund etc.
These assets are still controlled by the Trustee, who can deal with them at any time in the future. This may not be for a number of years after your discharge. In certain cases such as your family’s home and some types of insurance policy, a spouse, a relative or a friend may want to buy your interest, in which case, they are to get in touch with the Trustee straight away to find out how much they would have to pay.
You must tell the Official Receiver about any assets that may have been obtained after the Trustee has finished dealing with your case but before you are discharged. These assets could be claimed to pay your creditors.
You have a duty to continue to assist yo
