Good evening,
I agree with Oliver that on the face of it with no assets Bankruptcy immediately stands out as a viable option. For someone in your position, Bankruptcy is not as bad as it sounds.
• The responsibility for paying your debts will be away from you
• You will normally be Bankrupt for just 12 months. After that period you will be discharged.
• If you can afford to do so, you will have to make monthly payments towards your debt for 3 years. However, after these payments are completed, any outstanding debt will be written off by law.
• If you declare bankruptcy, you will be allowed to keep reasonable household items. You will not have to give up reasonable goods such as your washing machine, fridge freezer television and DVD player.
However, as discussed, you should be mindful of the following:
• If you are declared bankrupt, your name and address will be published once in the local newspaper and the London Gazette
• The record of your bankruptcy remains on your credit file for 6 years meaning it will be difficult to obtain further credit during this time. In reality many people are able to borrow again within this period, particularly for a mortgage.
• You will have to give up your share of any equity you have in a property. This may result in the sale of the property unless a friend or family member can raise a similar sum on your behalf which can be given to the Court in lieu of your equity.
• You may have to trade in a car worth more than £1500
• You will be unable to act as a company director or be involved with the management of a limited company while you are bankrupt
WHAT WILL BANKRUPTCY COST?
In order to declare your self bankrupt, you will need to pay Court Fees. These normally total a one off charge of between £460-£490. However, you may be eligible for a reduction of you currently claim certain benefits.
WHAT SHOULD I DO NEXT
If you decided to proceed with bankruptcy, you should take the following steps:
1. Identify the local County Court and Tel Number
To declare bankruptcy, you will have to attend the County Court local to where you live. You can find out where this is through the local telephone book, directory enquiries or by searching on the Court Finder web site:
http://www.hmcourts-service.gov.uk/HMCSCourtFinder/
2. Contact Court and Request Bankruptcy Application Form
Telephone the local County Court and ask them to post you an application form. The Court will do this free of charge. At the same time, confirm the charge with the Court (normally £460/person) and whether you need to make an appointment or whether you can just turn up at the Court at any time.
3. Complete the Bankruptcy Petition Document & Bankruptcy Application Form
Bankruptcy application forms are c30 pages in length. They need to be completed fully and correctly. This will normally take between 1-2 hours. Make a photocopy of the completed forms for future reference.
Note: The Court is unable to give advice on completing your Bankruptcy application forms. If you require additional advice and help to do this, Thomas Charles can help. You will be charged a fee of £200 for this service.
4. Present Completed Application Form at Court
Once your forms are completed, you must take the forms together with your fee in person to the Court. Once at court the following process will happen:
• A Clerk of the Court will take the fee, ensure that the application forms are correctly completed and witness your signature on the Petition Document.
• You will meet with a District Judge (private room). The Judge will ensure that you are eligible for Bankruptcy (i.e. insolvent) and will determine whether bankruptcy is appropriate. If the Judge agrees with the Petition, they will declare you bankrupt the same day.
• You will be asked to make an appointment with the Official Receiver. Depending on the Court, this may be on the same day or a different future date.
5. Meeting The Official Receiver (OR)
The Official Receiver (OR) (or Trustee in Bankruptcy) is responsible for deciding decide on a number of things:
• How long your bankruptcy will last. This will normally be 12 months although the OR has discretion to shorten or lengthen this.
• If you can afford to make a monthly payment towards your debt and if so how much (known as an Income Payment Order which will normally last 36 months)
• If you have any assets or property, how these will be treated. I.e. if and when they will be sold to realise the asset value for the creditors
I hope you find this information useful.
Kind regards,
Julia Simavi
Shortlisted with special commendation for Debt Counsellor of the Year by Credit Today Awards 2007
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Credit Today Awards 2007
http://www.credittoday.co.uk/awards/winners.htm
