Designed for those with very serious overwhelming debt problems, bankruptcy is a way of dealing with debts that you cannot afford to pay.
Bankruptcy proceedings will relieve you from overwhelming debts, allowing you to make a fresh start, this is of course subject to several restrictions. With bankruptcy proceedings, your assets will be shared out fairly among your creditors, so they can recoup as much of the debt you owe to them as possible.
Bankruptcy is not just designed for individuals but also individual members of a partnership, partnerships themselves and companies.
Being made bankrupt will mean you will have to give up any possessions of value and also any interest in your home. If you have a business, you will have to close it and any employees you have will need to be dismissed. Once you are made bankrupt, you will no longer have control of your assets, the only items you may keep are tools, equipment and books needed for work and household items including bedding, furniture etc. and clothing etc. All of your other assets will be put in control of either the Insolvency Practitioner or the Official Receiver, who will put them up for sale and will use the proceeds to go towards paying the fees and costs involved with your bankruptcy and paying towards your debts.
To be made bankrupt, a bankruptcy petition has to be presented, this is either presented by yourself (debtor’s petition) or by one or more of your creditors who you owe at least £750 in unsecured debt to (creditor’s petition). Once the bankruptcy petition has been presented, the court can make a bankruptcy order.
The court can still make a bankruptcy order even if you refuse to acknowledge the proceedings or if you refuse to agree to them. Once bankruptcy proceedings have begun, you should fully co-operate. If you dispute the creditor’s petition for bankruptcy, you should try and reach a settlement before the bankruptcy petition is due to be heard. Trying to dispute the creditor’s claims after a bankruptcy order has been made can be very difficult and also very expensive.
Petitions for bankruptcy are usually presented at the High Court in London or a county court near to where you live or your business trades.
Once your bankruptcy order has been made, the Official Receiver will advertise details of the notice in the ‘London Gazette’, an official publication containing legal notices, details of your bankruptcy may also be advertised in your local press.
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