Click on the links below to find answers to your questions.
1. England
Contact your local county court (or High Court of Justice in London) and request the forms. Check how much the fee is (currently approximately £480) and then complete the forms. If confused or worried about completing the forms most courts can refer you to the Citizens Advice Bureau who will assist. Once completed return to court with the papers and fee and the bankruptcy will proceed. A reduction is available if low income or benefits are received.
2. Northern Ireland
Contact High Court of Justice in Belfast (02890 235111) and request papaers. The fee payable is £312. Once papers are complete you must go to the Insolvency Service and pay a fee of £250. You must then go to the High Court of Justice with a further fee of £62 (again this can be waived). The bankruptcy can then proceed. The hearing takes less than 10 minutes.
There is nothing in the legislation preventing a bankrupt from holding a bank account. It is the prerogative of each bank as to what facilities are made available. Most allow bankrupts to hold basic accounts until the bankruptcy is discharged. If the bank account is overdrawn at the time of the bankruptcy then it will be closed and become an unsecured creditor.
A car is normally exempt as it is usually required for travel to and from work. However this only applies if the vehicle cannot be sold and a cheaper replacement bought. A value of £3000-£4000 is a guide for the maximum allowable.
If the car is on Hire Purchase (H.P.) the agreement is automatically terminated. This entitles the H.P. Company to immediately seize the vehicle even if payments are up to date. However in practise the H.P. Company is unlikely to take the vehicle provided all payments are made on time but should one payment be missed the vehicle will be repossessed.
If the property is subject to a tenancy then it is rarely an issue. However if there are arrears of rent they will form a debt in the bankruptcy which could create a problem with the landlord. If in doubt check the agreement and seek legal advice.
If the property is owned by the debtor on the date of the bankruptcy it “Vests” in the Official Receiver. This means that it no longer belongs to the debtor and must be bought back should the debtor wish to remain there. The price paid is normally the amount of “realisable equity” in the property but is subject to negotiation.
In addition the funds must come from a third party as the bankrupt would have no money of their own. Realisable equity is the value less any outstanding mortgages and charges with an allowance made for estimated sales costs.
In England and Wales there is a time limit of three years to realise the assets after which time the Official Receiver or Trustee’s interest expires. There are exceptions so again if in doubt seek advice.
Northern Ireland is now the same as the UK.
Therefore a property in negative equity at the time of the bankruptcy can be bought back for as little as £1 but if not done then any subsequent rise in equity belongs to the Official Receiver and not the bankrupt.
Bankruptcy is a term given to a form of dealing with your debts that you can no longer afford to pay. It enables you to wipe the slate clean in a debt sense, allowing you to start afresh. All your existing assets are taken from you and are divided up and given to your creditors.
Bankruptcy gives
you protection from Creditors as do an IVAs,
however if you have no assets and
little disposable income then bankruptcy
is a better alternative to an IVA or pro
rata (debt management). A pro rata offers
no protection as legal action doesn't stop
and all debts will be paid in full. This
could take many years to conclude. Bankruptcy
allows for a clean start as it only lasts
12 months as opposed to 60 months in an
IVA.
An employer cannot fire you simply because you have filed for bankruptcy. In most cases the employer will not be aware of your actions. However, if there is a wage garnishee in place, your employer will be notified to cease deductions immediately.
No. There is no such thing as a 'black list'. Only the bankrupt will be affected. However if anyone living at the address is concerned they can apply to Equifax or Experian for a copy of their credit file and have any reference to any person other than themselves removed from it by sending a letter of disassociation.
Once it has been made, it is advertised in “The London Gazette” (an official publication which contains legal notices) and in a local or national newspaper (or both). In addition the Official Receiver will give written notice of the order to a number of organisations.
Yes. As soon as the bankrupt is discharged, normally within 12 months, they can get a mortgage.
If you were made bankrupt on or after 1 April 2004, you will be automatically freed from bankruptcy (known as “discharged”) after a maximum of 12 months. This period may be shorter if the Official Receiver/IP concludes his enquiries into your affairs and files a notice in court.
If you were made bankrupt before 1 April 2004
If this is your first bankruptcy, you will be discharged automatically on 1 April 2005 or, if you currently expect your discharge date to be before 1 April 2005, you will receive your discharge on that earlier date.
If you have been an undischarged bankrupt at any time during the 15 years before the current bankruptcy (unless the previous bankruptcy has been annulled) you will be discharged automatically on 1 April 2009. Or you may ask the court for a discharge 5 years after the date of the bankruptcy order, but the court may refuse or delay your discharge, or grant it conditionally on terms requiring you to make some payments out of your income.
You will also become free from bankruptcy immediately if the court annuls (cancels) the bankruptcy order; this would normally happen when your debts and the fees and expenses of the bankruptcy proceedings have been paid in full or the bankruptcy order should not have been made.
On the other hand, if you have not carried out your duties under the bankruptcy proceedings, the Official Receiver may apply to the court for your discharge to be postponed. If the court agrees, your bankruptcy will only end when the suspension has been lifted and the time remaining on your bankruptcy period has run. If your discharge has been suspended (stopped) prior to 1 April 2004, you should contact the Official Receiver for information about how and when you may be discharged from bankruptcy.
Yes, McCambridge Duffy and its members are regulated by the ICAEW (Institute of Charted Accountants in England and Wales), ICAI (Institute of Chartered Accountants in Ireland), ICAS (Institute of Chartered Accountants of Scotland)
We are also members of: R3 (The Association of Business Recovery Professionals) and the IPA (Insolvency Practitioners Association)
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