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Bankruptcy - What is bankruptcy?
Bankruptcy is one way of dealing with debts you cannot pay. The
bankruptcy proceedings free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are spread out equally amongst all of your creditors. All creditors that you have must be included. Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.
How much does it cost to go bankrupt?
Once the fees have been paid the only fee left is the £510 (correct from 6th April 2009) to the court. This has to be paid in all cases and without this the court will not accept your application. There are circumstances in which this can be reduced and this is if you are in receipt of certain state benefits for example incapacity benefits. The fee is then reduced to £345 (correct at time of publishing)
How are you made bankrupt?
An individual can be made bankrupt either in one of three ways: * Voluntarily - By the debtor themselves. A bankruptcy order can still be made even if you refuse to acknowledge the proceedings or refuse to agree to them. You should therefore co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditor’s claim, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to do so after the bankruptcy order is made is both difficult and expensive.
What are the implications of bankruptcy?
* You lose control of your assets.
* You cannot obtain credit for over £250 without the permission from the lender. * You cannot act as a company director. * You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court. * You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy. * You may not practice as a Charted Accountant / Lawyer. * You may not act as a Justice of the peace (JP). * You may not become an member of parliament. * You may not become a member of the local authority. * Your credit is affected for many years after the annulment. * You may be publicly examined in court. In some bankruptcy cases, particularly those included in chapters 7, 11 or 13, the court appoints an administrator to oversee the process. The debtor's participation or involvement in the bankruptcy procedure is usually very limited. In cases in Chapter 7, the debtor does not appear in the proceedings unless objections are raised in the case. Under chapter 13, the debtor may appear before the bankruptcy judge to confirm the plan only during the hearings. The debtor is expected to meet with creditors at meetings specially arranged to be held at the offices of the U.S. trustees. These meetings are held in the framework of Article 341 of the Bankruptcy Code and are usually referred to as 341 meetings. The question of creditors to debtors about their assets and debts during these meetings.
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