Posted on 12th February 2019
Bankruptcy is a multi-faceted beast- well, there are two ways of going bankrupt, and there are orders, assets, restrictions and registers to think of.
If you can’t pay your debts, then you could make an online application to go bankrupt. Despite what most people believe, the cost of going bankrupt isn’t cheap, and in some cases, is certainly not a ‘soft option’, there being an application fee of £680.00, and there is no guarantee that the adjudicator, this being the person who works for the Insolvency Service, and will review your application, will actually make you bankrupt.
The adjudicator will send an email within 28 days, confirming if the application is successful or not. If your application is unsuccessful, the £680.00 is not returned to you.
If you are declared bankrupt you may be asked to attend an interview with the official receiver. During the interview, the official receiver would ask for more information about assets held, pensions, and so forth, and request details on why you became bankrupt.
If you are made bankrupt, then you will not simply walk away from any debts; your assets, including your house, car, and any luxuries you may hold, will be taken into account and used to pay off your debts. You are allowed to keep work-related items, such as a vehicle and tools, and household items, these being the basic necessities, such as clothing, bedding and furniture.
The official receiver will see that your bank accounts are frozen, although you will be allowed an immediate payment for basic requirements such as food. But that is all. Will your pension by safe? Well, yes, and no. Any monies that you are receiving from a pension at the time you are declared bankrupt, will be counted as income, and therefore taken into consideration by the official receiver. Any money you have put into a pension plan, will usually be untouched.
Then there are the restrictions. You can, for example, borrow no more than £500.00 without telling the lender you are a bankrupt. You cannot be the director of a company, without first asking the court’s permission.
Any bankruptcy will end, usually 12 months after the adjudicator made the declaration of bankruptcy. When the bankruptcy is discharged, most debts that existed prior to being declared bankrupt will be written off. But there are certain types of debt that remain live, subject to an application to the court requesting otherwise. And they are, in no particular order: any monies that are order subject to Family Law Proceedings (with this in mind, find a local solicitors dealing in family law to advise); any monies owed to an injured person, and those relating to personal injury (again, attend upon a local personal injury solicitor in this regard). And of course student loans and any court fees payable to the court.
So, that’s when a person wants to make themselves bankrupt.
What if it’s the other way around, and someone, or various people, want to make you bankrupt?
Well, if you owe more than £5,000.00 to an individual, or group of people, on aggregate, then they can. The adjudicator (remember him?) will expect the parties involved to have issued a Statutory Demand (see MG Legal’s blog on Statutory Demands, here), or hold a court judgment before they will allow the application, and if you need any advice on this, then attend upon a local solicitor.
Our team of solicitors in Longridge, Preston, and Lancaster will be able to advise in this area. If you are made bankrupt in this way, then you are subject to the same restrictions as if you were to make yourself bankrupt, as described above.
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Tagged as: Bankruptcy, Family Law, Garstang, Lancaster, Longridge, Personal Injury, Preston, Your Local Solicitors
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