Bankruptcy FAQ's

1. I have a demanding career and can’t afford to lose my job.

This depends on the industry you are in; members of a professional body may be subject to certain restrictions so you should check the Terms of Employment in your contract for a definite answer.

2. I wouldn’t want to lose my home, may I keep it?

There is always the possibility that your home may be sold to pay off your debts, so always seek expert advice.

3. What are the negative consequences of declaring myself bankrupt?

Do not see bankruptcy as the easy way out. There are many consequences to declaring oneself bankrupt, all of which need to be carefully considered.

The social stigma: your details are published in a local newspaper.

Future credit: applying for credit or opening a bank account may be difficult.

Your career: there are a number of careers that exclude bankrupts, or even discharged bankrupts.

Do consider carefully before doing anything. Always seek professional advice

4. What other options do I have besides bankruptcy?

There may be a number of alternatives to consider. IVAs can write off a large portion of your debt and you make monthly repayments, typically over a period of 60 months.

A Debt Management Plan may be another option whereby you only pay back each month what you can realistically afford.

Contact Harrington Brooks for more details and we will advise you what your options are and whether you can avoid bankruptcy.

5. What is the proper definition of bankruptcy?
Individuals who are unable to meet all of their financial commitments as they fall due, or whose liabilities exceed their assets, may apply to Court to be declared bankrupt.  Alternatively a creditor who is owed £750 or more can petition for a person’s bankruptcy.

Bankrupts who have assets that can be released for the benefit of their creditors are assigned a trustee who will sell their assets and distribute the funds to the different creditors.  Once this process starts, creditors will be unable to claim anything else from you.

6. How does the bankruptcy Process Work?

If you want to file for bankruptcy, you have to file a Bankruptcy Petition (Debtor's Petition). Alternatively, any of your creditors can file a Bankruptcy Petition (Creditor's Petition) against you if they are owed £ 750 or more.

Once the bankruptcy petition has been filed, a Court date will be set for the initial hearing to see if a Bankruptcy Order should be made. You will then be declared bankrupt if the Court deems it appropriate.

7. Where is the bankruptcy Order Made?

The same Court where the Bankruptcy Petition was filed will issue the Bankruptcy Order. Normally, these Petitions are filed at a County Court near to where you live and work or at the High Court.

8. What are some of the effects of bankruptcy?

• The Trustee controls all of your assets, including your home
• You cannot obtain credit of more than £ 500 without disclosing your bankrupt status
• You can only conduct business in the name in which you were made bankrupt
• You cannot be involved in forming, managing or promoting a company without the court's permission
• There are certain public offices that you cannot hold

9. Can I rely on advice from Harrington Brooks?

Absolutely, Harrington Brooks is a registered debt advice specialist. Call us and speak to a trained specialist who has experience in dealing with debt problems. We will be able to advice you on the full range of debt solutions.

10. How can I be sure if bankruptcy is right for me?

This is a vital question. It is possible that an IVA, or another debt solution, may be more appropriate for your individual situation, rather than bankruptcy. Do talk to us first. It won't cost you a penny and will help you make up your mind.

11. Is declaring myself bankrupt the right decision for me?

Before considering bankruptcy, you should investigate your options and speak to a qualified Insolvency Practitioner.

Declaring yourself bankrupt is a huge step and the decision should not be taken lightly. There are other options available to you. Just call one of our advisors now and they will discuss your current financial situation with you and help you to find solutions to take steps to resolving your debt problem.

12. Can I make someone else Bankrupt?

Yes if they owe you £ 750 or more. In order to do so you may wish to instruct a solicitor to ensure that the correct process is followed. You must be aware that solicitors will charge for this therefore we would advise that you obtain references and quotes before appointing legal representation.

13. Can I still have a bank account?

According to insolvency legislation there are no rules to stop an individual who has become bankrupt from holding a bank account. However a person who has been declared bankrupt should inform their bank or building society about this change in their circumstances. The bank or building society may add some conditions of usage to the operation of your accounts depending on their own terms and conditions. You certainly should not be requesting any lending or overdraft facility whilst in this situation.

14. If I am declared bankrupt can I still work?

If you have been declared bankrupt you can still be self-employed or be employed. You have to ensure that you follow the rules imposed by bankruptcy and don’t obtain any credit higher than £ 500 without informing the lender that you are an undischarged bankrupt. Also, if your salary more than meets your household needs the Official Receiver could request an Income Payments Order (IPO).

15. How long does it take before I am discharged from Bankruptcy?

If you were declared bankrupt after 1st April 2004, you will normally be discharged one year from the date that the Bankruptcy Order took effect.

16. Can you explain what an annulment of a bankruptcy order is?

An annulment of a Bankruptcy Order is a process whereby a court can return you to the position you were at before your bankruptcy, and your status is as if the bankruptcy never occurred.

17. At what point can I apply for an annulment?

Annulments can be made at any time if you meet with any of the following criteria:

• If the Order to declare you bankrupt should not have been taken because of processes and procedures not being followed correctly when the Order was issued.
• You have managed to clear all of your bankruptcy debts and any associated costs have been paid or have been guaranteed and approved by Court.
• You have taken out an IVA (Individual Voluntary Agreement) therefore making an agreement with any creditors to pay off all or a proportion of your debts.
  

18. Can you explain what ‘discharge from bankruptcy is?

Being discharged from bankruptcy is the procedure whereby you are released from the constraints of bankruptcy and you are freed from the majority of debts owed at the time when you were declared bankrupt.

19. If I am declared bankrupt does this mean that I will still have to repay any outstanding student loans I have?

Since 1st September 2004 student loans are exempt and cannot be included in your bankruptcy.  The repayment of the student loan will be enforced according to its terms and conditions and it is the responsibility of the individual to repay this in full.

If you were declared bankrupt prior to 1st September 2004 you may still have to make arrangements for the full repayment.  The Official Receiver handling your case should clarify these matters.

20. If I live abroad, can I make myself bankrupt in England?

You can.  If you are residing in any other EU state, with the exception of Denmark, you can make yourself bankrupt in the UK if you can demonstrate to the Court that your main concern is based in the UK.