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What is Bankruptcy?
It is a common misunderstanding that Bankruptcy is only for companies
and businesses. It is not.
Bankruptcy is the way that an individual person can deal with personal
debts, which they have no hope of repaying. |
If
you have debts which you just can not afford to repay, either through an
IVA or an informal debt management programme, then Bankruptcy might be a
sensible option for you.
Bankruptcy is normally seen as a last resort after all other options for
repaying debt have been exhausted. If you are declared bankrupt, you
will no longer have to repay your creditors yourself and the court will
protect you from any further actions that your creditors threaten
against you. However, where you can afford to make any payment towards
your creditors, then you will be made to do so by the Court for up to 3
years.
Is Bankruptcy right for me?
There has been a lot of publicity surrounding changes in the law
regarding bankruptcy – the Enterprise Act introduced in April 2004. The
question is whether or not bankruptcy is now an easier way of dealing
with debt? Certainly, for some individuals, the new rules may be of
benefit. However, it is arguable that for the majority of people, the
law has not made bankruptcy any easier, and in some aspects, it has
become more onerous.
Bankruptcy remains a serious matter! Before deciding to proceed with
bankruptcy you should contact Vincent Bond & Co Ltd for further
professional advice.
Facts about Bankruptcy:
• The responsibility for paying your debts is taken away from you by the
Court.
• You will normally be Bankrupt for 12 months.
• You may have to make monthly payments towards your debt for 3 years.
• After 3 years, any outstanding debt is written off.
• The record of your bankruptcy remains on your credit file for 6 years.
• You will have to give up your share of any equity in property you own.
• You will be allowed to keep reasonable household goods.
• You will be allowed to keep your car as you have a reasonable
requirement
for it and it is not unreasonably valuable.
What happens to my property and belongings?
You will normally be able to keep reasonable personal items and
household goods such as furniture and electrical goods as long as their
value is not greater than the cost of their reasonable replacement.
However, you will be expected to sell valuable assets such as antiques
and expensive vehicles.
As a bankrupt, your title to any house you own or are paying a mortgage
on will be passed to the Court. As such, ownership of any equity that
you have personally in the property will pass to the Court. The Court
will want to realise such equity for the benefit of your creditors.
This means that either you will need a third party to make an offer to
the Court to buy out your equity or the Court will force the sale of the
property to release the equity. If your husband, wife or children are
living with you, it may be possible to put off a sale until the end of
the first year of your bankruptcy to give time for other housing
arrangements to be made. Your spouse or any other interested party would
be encouraged to take legal advice about the home as soon as possible.
What will Bankruptcy cost?
In order to declare your self bankrupt, you will need to pay Court Fees.
These normally total a one off charge of £510. If you require additional
advice and help to complete your application forms, you must also expect
an additional charge for this service.
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Vincent Bond on the BBC more |
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Vincent Bond on the BBC more |
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