You could be declared bankrupt as a result of a petition being presented to the court, usually because you are unable to pay your debts. Someone you owe money to (a ‘creditor’) can ask the Court to make you bankrupt, or you can make yourself bankrupt.
In the event of a successful petition, your assets will be entrusted to a ‘Trustee’, a person appointed to administer your financial affairs. The Trustee will initially be the Official Receiver who may pass your case to a licensed insolvency practitioner. The Trustee’s role is to sell your assets and then use the monies raised to make a distribution to your creditors.
Some of your assets are excluded from the bankruptcy order. These typically include assets that are required for your essential day-to-day living. If you receive an income, then an Income Payments Order (IPO) may be made against you for up to three years.
Is Bankruptcy the right choice for you?
Whilst the stigma of bankruptcy has faded in recent years, particularly following the financial crash in 2008, there still remain serious implications for the individual. For example, you cannot be a company director whilst you are an ‘undischarged bankrupt’ and you may be subject to a Bankruptcy Restrictions Order (BRO) which may place additional restrictions on you.
Depending on your circumstances, bankuptcy may be the right route for you, but it is vital to explore all your options before you make a decision. An IVA may be a better option, depending on your circumstances.
– Are you looking for company bankruptcy? Click here to find out about the range of options for business bankruptcy.
To understand the full implications of declaring bankruptcy for yourself, call us today on 0114 285 9500.