|
What is bankruptcy?
Bankruptcy is one way of
dealing with debts you cannot pay. The bankruptcy
proceedings will free you from overwhelming debts so you can
make a fresh start, subject to some restrictions; and make
sure your assets are shared out fairly among your creditors.
Anyone can go bankrupt, including individual members of a
partnership.
How are you made
bankrupt?
A court makes a bankruptcy
order only after a bankruptcy petition has been presented.
It is usually presented either by yourself (debtor’s
petition); or by one or more creditors who are owed at least
£750 by you and that amount is unsecured (creditor’s
petition).
Bankruptcy petitions are
usually presented at a county court near to where you trade
or live or at the High Court in London.
What happens to my
assets?
You will no longer control
your assets.
You can keep the following items unless their individual
value is more than the cost of a reasonable replacement:
tools, books, vehicles and other items of equipment which
you need to use personally in your employment, business or
vocation; clothing, bedding, furniture, household equipment
and other basic items you and your family need in the home.
The Official Receiver or any insolvency practitioner who is
appointed as trustee will take control of all your other
assets on the making of the bankruptcy order. He will
dispose of them and use the money to pay the fees, costs and
expenses of the bankruptcy and then your creditors.
What happens to my home?
If you own your home,
whether freehold or leasehold, solely or jointly, mortgaged
or otherwise, your interest in the home will form part of
your estate which will be dealt with by your trustee. The
home may have to be sold to go towards paying your debts.
If your husband, wife or
children are living with you, it may be possible for the
sale in the bankruptcy to be put off until after the end of
the first year of your bankruptcy. This gives time for other
housing arrangements to be made. Your husband, wife,
partner, a relative or friend may be able to buy your
interest in your home from the trustee. Such a purchase
would prevent a sale of the property by the trustee at a
future date. Your spouse or any other interested party
should be encouraged to take legal advice about the home as
soon as possible.
You will have to
pay if you petition for your own bankruptcy. In all cases
you will have to pay a deposit of £325 towards the costs of
administering your bankruptcy. There is also a Court fee of
£150.00. In some circumstances the court may waive this fee;
for example, if you are on Income Support. If you are not
sure whether you qualify for a reduction in the fee or
whether you are exempt from paying the fee, court staff will
be able to advise you.
Go Back
|
