FAQ - Bankruptcy

1. I have a demanding career and can’t afford to lose my job.
This depends on the industry you are in. members of a professional body may have to resign so you should check the Terms of Employment in your contract for a definite answer.

2. I wouldn’t want to lose my home. May I keep it?
There will always be the slight, or not so slight, possibility that your home may be sold to pay off your debts.

3. What are the negative consequences of declaring myself bankrupt?
Do not see bankruptcy as the easy way out. There are many consequences to declaring oneself bankrupt, most of which do not receive much thought.

The social stigma: your details are published in your local newspaper and it is available online.

Future credit: applying for credit or opening a bank account may be difficult.

Your career: there are a number of careers that may not be very welcoming to bankrupts, or even discharged bankrupts.

Do consider carefully before doing anything.

4. What other options do I have besides bankruptcy?
There may be a number of alternatives to consider. IVAs write off a large portion of your debt and you make monthly repayments over a period of 60 months.

A Debt Management Plan may be another option.

Contact Harrington Brooks for more details and we will attempt to assist you.

5. What is the proper definition of bankruptcy?
Individuals who owe more than £750 may apply for bankruptcy if they struggle to repay their debt.
Bankrupts are assigned a trustee who will sell all their assets and distribute the funds to the different creditors. Once this process starts, creditors will be unable to claim anything else from you.

6. How Does the bankruptcy Process Work?
If you want to file for bankrupt, you have to file a Bankruptcy Petition (Debtor's Petition). Alternatively, your creditors can file a Bankruptcy Petition (Creditor's Petition) against you if your debts exceed £750.

Once the bankruptcy petition has been filed, a court date will be set for the initial hearing to see if a Bankruptcy Order should be made. You will then be declared bankrupt.

7. Where is the bankruptcy Order Made?
The same court where the Bankruptcy Petition was filed, will issue the bankruptcy order. Normally, these Petitions are filed at a county court near to where you live and work or at the High Court.

8. What are some of the effects of bankruptcy?

• • The Trustee control your assets, including your home
• • You cannot obtain credit of more than £500 without disclosing your bankrupt status
• • You can only conduct business in the name in which you were made bankrupt
• • You cannot be involved in forming, managing or promoting a company without the court's permission.
• • There are certain public offices that you cannot hold.

9. Can I rely on advice from Harrington Brooks?
Absolutely. We are a registered organisation and it is our aim to help people who are in serious financial turmoil. Call us and speak directly to fully trained experts with vast experience of dealing with debt problems.

11. How can I be sure if bankruptcy is right for me?
This is a vital question. It is possible that an IVA, or another debt solution may be more appropriate for your individual situation, rather than bankruptcy. Do talk to us first. It won't cost you a penny and will help you make up your mind.

12. Is declaring myself bankrupt the right decision for me?
Before considering bankruptcy, you should investigate your options and speak to a qualified Insolvency Practitioner or Financial Advisor.

Declaring Bankruptcy is a huge step and a decision which should not be taken lightly. There are other options available to you. Just call one of our advisors now and they will discuss your current financial situation with you and help you to find solutuions to take steps to resolving your issues.

13. Can I make someone else Bankrupt?
You can make someone else bankrupt. In order to do so you would need to instruct a solicitor. You must be aware that solicitors will charge for this therefore we would advise that you obtain references and quotes before appointing legal representation.

14. Can I still have a bank account?
According to insolvency legislation there are no rules to stop an individual who has become bankrupt from holding a bank account. However a person who has been declared bankrupt should inform their bank or building society about this change in their circumstances. The bank or building society may add some conditions of usage to the operation of your accounts depending on their own terms and conditions. You certainly should not be requesting any lending or overdraft facility whilst in this situation.

15. If I am declared bankrupt can I still work?
If you have been declared bankrupt you can still be self-employed or be employed. You have to ensure that you follow the rules imposed by bankruptcy and don’t obtain any credit higher than £500 without informing the lender that you are an undischarged bankrupt. Also, if your salary more than meets your household needs the Official Receiver could request an Income Payments Order (IPO).

16. How long does it take before I am discharged from Bankruptcy?
If you were declared bankrupt after 1st April 2004, you will be discharged one year from the date that the bankruptcy order took effect.

If your bankruptcy order was made prior to 1st April 2004.

17. Can you explain what an annulment of a bankruptcy order is?
An annulment of a bankruptcy order is a process whereby a court can annul / cancel your bankrupty order.

18. At what point can I apply for an annulment?
Annulments can be made at any time if you meet with any of the following criteria:

• If the order to declare you bankrupt should not have been taken because of processes and procedures not being followed correctly when the order was issued.
• You have managed to clear all of your bankruptcy debts and any associated costs have been paid or have been guaranteed and approved by court
• You have taken out an IVA (Individual Voluntary Agreement) therefore making an agreement with any creditors to pay off all or a proportion of your debts.
  

19. Can you explain what ‘discharge from bankruptcy is?
Being discharged from bankruptcy is the procedure whereby you are released from the constraints of bankruptcy and you are freed from the majority of debts owed at the time when you were declared bankrupt.

If I am declared bankrupt does this mean that I will still have to repay any outstanding student loans I have?

Since 1st September 2004 student loans are exempt and cannot be requested as part of bankruptcy. The repayment of the student loan will be enforced according to its terms and conditions and is the responsibility of the individual to repay this in full.

If you were declared bankrupt prior to 1st September 2004 you may still have to make arrangements for the full repayment. The official receiver handling your case should clarify these matters.

20. If I live abroad, can I make myself bankrupt in England?
You can. If you are residing in any other EU state, with the exception of Denmark, you can make yourself bankrupt in the UK if you can demonstrate to the court that your main concern is based in the UK.

21. If you reside in any other country you can apply for bankruptcy if:

• You are actually in England or Wales on the day that the declaration to the court is made.
• If you have resided or operated a business in England or Wales in the previous 3 years.

Please note that the country in which you reside may not recognise your bankruptcy status, therefore any creditors you have may have claims against you.