Bankruptcy

  Many customers who have contacted us in the past have believed bankruptcy to be their final and only option. However at Harrington Brooks, through our One Advice Insolvency Practice, we have solutions that may assist your debt issues. Bankruptcy may not be your only option. You should carefully consider what bankruptcy involves and what alternatives you have before you make your application. For example you could have the option to take an Individual Voluntary Agreement Plan or Debt Management, depending on your financial circumstances.

The decision to apply for bankruptcy is a serious decision to make, and our qualified consultants will give you free advice to guide you to make the right choice.

Individuals declaring themselves bankrupt have to surrender their assets and use this to pay off their debts. A clean start is possible, as most of the debts are written off completely. However being declared bankrupt no longer carries a social stigma as it once did. Clearance now happens after only 12 months, which is a considerable improvement on the 36 months timescale.

What are the advantages to Bankruptcy?

• All your debts are written off, and you are guaranteed to be free of debt within 12 months.
• A fresh financial start
• Your living conditions will not change if you are in rented accommodation.
• Creditors will recognise that you will pay less than what you owe to them.
• You no longer have to deal with creditors yourself.

What are the disadvantages of Bankruptcy?

• You will lose all your assets and will have to pay your creditors with the money from the sale of your property or car.
• People who live in rented accommodation who are behind on their payments, may be subject to a possession action
• All additional income will be paid to creditors
• Your future career prospects may be hindered, as there are a number of positions from which bankrupts are banned
• Your credit rating will be affected and it might take a number of years to rectify.
• You will be unable to open up a new bank or building society account
• If you want credit in excess of £500, you will have to declare your status.
• The details of your bankruptcy will be published and can be viewed at the Insolvency Service website
• There are certain debts that cannot be written off. These are fines, maintenance or child support, personal injury debt, and fraud.
  

The Bankruptcy Process

Before planning to do anything, it is best to do as much research as possible. Examine the alternatives you have and get advice from an Insolvency Practitioner. You will then have a better idea if Bankruptcy is your best option.
The court will determine whether you can be made bankrupt. This happens after a petition has been presented by you or by your creditors.

The Official Receiver, who is a civil servant and an Officer of the Department of Trade and Industry, will require full details of your finances and may ask you for a face-to-face interview.

Next, they will call a meeting of your creditor during which they explain what is happening to your assets and any disposable income. If you have any assets that can be sold to repay your creditors, they will appoint a Trustee, or Insolvency Practitioner, to deal with this process.

If you have extra income available to you, the Trustee or Official Receiver will ask the Court to provide an Income Payments Order, which will be enforceable for three years. Even if you are discharged after one year, this order will still be in effect.

All utility suppliers and landlords will be notified of your new financial situation.