Bankruptcy is a legal process resulting in a 'Bankruptcy Order'. A Bankruptcy Order may be obtained by any creditor owed more than £750, or an individual may petition for their own bankruptcy. Once the order has been made by the court a Trustee will control your assets, oversee your finances and any further interest and charges on your debts will be frozen.
What happens in bankruptcy:
- Control of your assets will be given to a Trustee appointed by your creditors
- Your house and other valuable assets may be sold to raise money to pay creditors
- If you can make any payments from your income, these will be made monthly for up to three years
- Your bankruptcy will be advertised in at least one newspaper
- Whilst bankrupt you must disclose your bankruptcy status to a lender if you wish to obtain any credit greater than £500
- You will be freed (discharged) from bankruptcy usually after one year
- When you are discharged you are free from any bankruptcy restrictions
- However your trustee can still realise any assets you had at the time of the bankruptcy, even after your discharge
Certain debts, such as student loans, fines and CSA payments, are not covered by a Bankruptcy Order so remain to be paid by you.
There are also a number of implications following bankruptcy which may affect your future such as your ability to be a company director, practice as a lawyer or accountant, or as a Local Authority councillor.
In appointing RSM Tenon we will ensure this is all done for you.