What is Bankruptcy?
Bankruptcy is one way of becoming debt free from debt that you might never be able to repay. If you have any questions, read on or call 0808 160 5577 or email us via our contact page
Please describe the Bankruptcy Process?
You will have to make a petition to your local County Court or the High Court in London. Please note that not all County Courts have bankruptcy jurisdiction.
The petition asks you for details of your income, outgoings, debts and assets. Your petition must be completely truthful and accurate. It will need to include all household income and expenditure.
Your petition will be examined and the court will decide whether to make a Bankruptcy Order. Some Courts make an order without you seeing the Judge and others require you to be interviewed.
You will be interviewed by the Official Receiver. The Official Receiver is a civil servant who will deal with the creditors and decide what to do with assets such as vehicles and property. Sometimes the interview is in person and sometimes it is on the telephone. It will depend on your local Official Receiver’s policy and the circumstances of your case.
In Bankruptcy your assets are usually sold. Your creditors are then paid with the proceeds of the sale. If the creditors are not paid in full then any shortfall is written off. Very few people have any real assets. It may be that you have some equity in a house or a car, but generally this will be all that will be available for the Official Receiver.
You will be subject to certain restrictions during and after the Bankruptcy proceedings. In general there is nothing in the restrictions that should bother 99% of people choosing to go bankrupt.
If you have any questions read on or call us free on 0808 160 5577 or contact us by email from our contact page.
What is the cost of Bankruptcy?
Bankruptcy costs £510. This includes:
The court fee of £150.
The Official Receiver’s fee of £360.
This fee is payable when you take your petition to the court. The fee must be paid in cash. Certain charity cheques are accepted (see below), but prepare to pay your fee in cash.
What do I do if I can’t afford the fees?
In some circumstances the court fee of £150 can be waived. If you receive income-based benefits such as Income Support then the court fee should be waived. The fee can also be waived in cases of hardship and if you have a low income. You can apply for exemption using form EX160A. Everybody has to pay the Official Receiver’s deposit
As mentioned above some utility companies offer trust funds to those experiencing financial hardship. You should contact your gas, electric and water suppliers and ask if they run such a scheme.
It may be necessary for you to save money in order to pay for your Bankruptcy. Here we at Help With Debt can assist as we will take and bank your disposable income for you whilst you save for bankruptcy.
If you have any questions please read on or call us free on 0808 160 5577 or email us via our contact page.
What is the Bankruptcy process?
A petition must be completed and presented.
The relevant court forms can be collected from your local County Court. You will need to ask for form 6.27 (Debtor’s Petition) and form 6.28 (Statement of Affairs). These forms are also available online from the HM Court Service website.
You can also fill in the forms online via the Insolvency Service website.
We also have out own forms which we can fill in for you.
Before presenting your petition to the court you will be required to swear an oath. This has to be done in the presence of a court official, solicitor or a Commissioner for Oaths.
Please remember that not all County Courts deal with Bankruptcy proceedings. We will be able to advise you which is your nearest court with bankruptcy jurisdiction.
You will need to pay the relevant fees and then the Bankruptcy proceedings will begin.
Here at Help with debt we actually take you through the whole process, from filling in your forms to attending court and providing an after event service.
If you would like this service please call us on 0808 160 5577. You can email us from our contact page.
Is it necessary to go to Court?
Yes. You will have to present your petition in person at the court. At some courts you may need to book an appointment. Coventry runs such a system for instance. We can book an appointment for you if necessary.
The court will sometimes hear your petition immediately but they might need to arrange a hearing at a later date. Some courts issue the petition on one day and hear the application a few days later. Again we can advise you what system each court operates.
Who else can make me Bankrupt?
Yes. If you owe a creditor over £750 then they can petition for your Bankruptcy.
Before making you Bankrupt a creditor would have to issue you with a Statutory Demand. Very many debt collection agencies now routinely send out statutory demands as a debt collection tactic. These cannot be ignored but there are ways to deal with such a procedure. Please call us free on 0808 160 5577.
Making you Bankrupt is likely to cost a creditor around £1500. If you owe a creditor a sum of money below £5,000 it is very unlikely that a creditor would go to the expense of issuing a petition without any guarantee of recovery.
The courts would have to approve the petition just as they would if you petitioned for your own Bankruptcy.
Can I be asked to contribute to my creditors after Bankruptcy?
The Official Receiver will assess your incomings and outgoings and decide if you have to pay any money into the Bankruptcy fund. We are experts in helping those seeking bankruptcy get their income and expenditure accurate. This is very important and we encourage you to utilise our expertise by calling 0808 160 5577.
You may be asked to pay a regular amount for a maximum of three years.
This is known as an Income Payment Agreement (IPA)/Income Payment Order (IPO).
If your circumstances change during this period then the Official Receiver could review your IPA/IPO.
If you lost your job the Official Receiver might reduce your payments and if you received a pay rise might ask you to contribute more.
Even if you are released from your bankruptcy early, your IPO/IPA will continue until it has run its agreed course.
Which debts are excluded from the Bankruptcy?
Student loans are excluded from Bankruptcy. Many students leaving University think that they can dump their debt this way. They cannot.
Benefit overpayments can sometimes be recovered even after Bankruptcy.
Court fines are excluded from Bankruptcy.
Child Support payments and other family maintenance debts are not included in Bankruptcy. Many court cases have tried to challenge these rulings but the fact remains that divorce and maintenance arrangements generally stick.
If you want to know if a debt can be written off please call our debt help line on 0808 160 5577 or email via our contact page.
Which possessions can the Official Receiver take?
The Official Receiver will only consider selling certain possessions. Unless their individual worth is greater than the cost of a reasonable replacement then the following items will not be taken.
Clothing, bedding and furniture.
Basic household goods and equipment.
Tools of trade.
Vehicles that are used personally in your employment.
Non-essential items with a high resale value will be taken and sold. However as we stated above 99% of people are only looking at a car or a house to be used to realise equity. You will be allowed a vehicle with a value of up to £2,000. We can advise you on what to expect with your vehicle. Please call us on 0808 160 5577.
What will happen to the house I own?
If you live in a mortgaged property or own your home outright then it may be sold.
The Official Receiver does not have to do this straight away and you will have time to find alternative accommodation. The Official Receiver has up to three years to deal with property.
We suggest that for a full explanation of how your property will be affected by a bankruptcy you call us on 0808 160 5577.
What if I rent my home?
If you live in rented accommodation then your landlord will be informed of your Bankruptcy.
You should check your tenancy agreement and seek legal advice to find out how your tenancy might be affected by Bankruptcy. We always remind clients that a landlord wants a tenant who pays rent, and so if you have always paid your rent and now you have disposable income, why would he ask you to leave.
Contact Steve Thatcher of Help With Debt (UK) Limited a total debt solutions company.
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