Canford House,
Discovery Court Business Centre,
551-553 Wallisdown Road,
Bournemouth BH12 5AG
Discovery Court Business Centre,
551-553 Wallisdown Road,
Bournemouth BH12 5AG
What is bankruptcy?
Bankruptcy is one way of dealing with debts you cannot pay. The bankruptcy proceedings free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are spread out equally amongst all of your creditors. All creditors that you have must be included. Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.When can I have my bankruptcy order?
For example if you have all the information we require at hand and have funds available and are able to complete our questionnaire and get it back to us. Or you may like to come to our offices and meet with an advisor then we are able to prepare your petition within 24 hours. If your local county court operates a walk in service or we are able to provide you with an appointment the very next day then you can have your bankruptcy petition within 48 hours of making contact with us. It can be that fast but is dependant on you being organised and prepared to move at speed.What is the bankruptcy process?
You are prepared by our trained case officers your petition and also your statement of affairs. Following this our staff will book an appropriate time to attend the court hearing. Following being heard at the court and the judge seeing the papers a bankruptcy order is made. You are then subject to the bankruptcy restrictions for up to 12 months. Do not sign any of the documents that are sent to you in final as these will need to be signed when you enter the court under am oath and as a result need to be witnessed.How much does it cost to go bankrupt?
Once the fees have been paid the only fee left is the £600 (correct from 6th April 2010) to the court. This has to be paid in all cases and without this the court will not accept your application. There are circumstances in which this can be reduced and this is if you are in receipt of certain state benefits for example incapacity benefits. The fee is then reduced to £450 (correct at time of publishing)Where is the bankruptcy order made?
The bankruptcy order is made at your local county court in an area in which you have lived for in the greater part of six months. In most cases this will also be the court that the IVA was ratified if this is the case.Am I in open court?
Bankruptcy is dealt with in closed court. You are not in a court room with a judge you are with a bankruptcy clerk. Normally there is only you and the bankruptcy clerk in the room.Do I have to see a judge while I am at court?
Normally the answer is no, however in some circumstances the judge may ask to see you. This is again not in open court and is in the chambers of the judge. The main reasons for seeing the judge is for clarification purposes.What happens during the bankruptcy hearing?
You will need to arrive at the court in plenty of time for the pre arranged appointment time, on arrival at the court you will have to contact the bankruptcy clerk. They will take you to look through the papers and will also require that you sign an oath to state that all of the information that has been provided is true to your best knowledge and belief. Following this the papers are sent to the judge where he will look through these. The clerk will either send you away fro a while or they will ask you to wait. The times in which you will be in the court vary from court to court. Following this the judge makes the order and you are then bankrupt. You will either receive a copy of the bankruptcy order or this will be sent to your home address.What happens after the court?
Following the making of the bankruptcy order your estate will be transferred to the Official Receiver. The Official Receiver should make contact with you within 48 hours of the order being made. In some cases the Official Receiver will contact you at the court. They will make initial contact and ask questions about any assets and bank accounts that you may have and also arrange an interview with you. In the main the interview that the Official Receiver has with you will be over the telephone. However, in some cases they may require to see you in person. The Official Receiver will give notice of the bankruptcy order to local authorities, utility suppliers, courts, sheriffs, bailiffs, National Savings and Investments (premium bonds), the Land Registry and any relevant professional bodies. Enquiries will also be made of banks; building societies; mortgage, pension and insurance companies; solicitors, landlords and any other persons or organisations who may be able to provide details of any assets or liabilities that you have, or have had, an interest in (either on your own or jointly with others). Third parties will also be asked about any other matters relating to your bankruptcy.What are my duties as a bankrupt?
When a bankruptcy order has been made, you must comply with the Official Receiver’s request to provide information about your financial affairs. The Official Receiver may request that you attend at his or her office for an interview - the Court will give you the address of the Official Receiver. (Note: usually before the interview, you will be sent or given a questionnaire which you should fill in as fully and accurately as possible.) If the Official Receiver does not ask that you attend at the office for an interview, you will be sent a letter which will set out what is required of you. Again it is likely that you will be asked to complete a questionnaire. 1) Give the Official Receiver a full list of your assets and details of what you owe and to whom (your creditors) 2) Look after and then hand over your assets to the Official Receiver together with all your books, records, bank statements, insurance policies and other papers relating to your property and financial affairs. 3) Tell your trustee about assets and increases in income you obtain during your bankruptcy. (Note: by law you must inform your trustee of any property which becomes yours during the bankruptcy. Such property includes lump sum cash payments that you may receive, for example redundancy payments, property or money left in a will). 4) Stop using your bank, building society, credit card and similar accounts straightaway. 5) Not obtain credit of £500 or more from any person without first disclosing the fact that you are bankrupt. 6) Not make payments direct to your creditors.What happens at the Official Receivers interview?
The Official Receiver will ask details about you assets. He will explain the procedures for certain types of assets such as houses, cars, life policies. He will also ask details about the credit that you have obtained. The sort of questions that he will ask will be: When did you obtain that account, what was that used for, how long has it taken for the debt to accrue, have you done balance transfers, if so how much were they for, when, what did you do once you did this, did you reuse the card, have you consolidated, is so when, how much. They will then ask you if you have sought any bankruptcy advice, if so from where and what did they say, did you follow this advice? Finally they will ask you to explain the causes of your bankruptcy.Will I lose my bank account?
Following the making of a bankruptcy order the Official Receiver will make enquiries into your bank account, during this time he will need to establish how much money is in the account and whether this is needed for everyday living expenses. The Official Receiver will ask for details of your income and expenses and he will require justification before he can release any funds to you. However, it is a commercial decision between the bank and yourself whether they trade with you. You would have to ask the bank whether they would be willing to allow you to keep your account.What will happen to my home?
If you own a home either solely or jointly the interest in the property mortgaged or otherwise will form part of your bankruptcy estate. Your home may have to be sold to pay off part of your debt. The Official Receiver will look into the value of the property and any loans secured on it. If the property is a family home then the Official Receiver will allow the proceedings to be halted in the first year whilst other housing arrangements are sought. If the property is jointly owned and your partner is solvent then there is a possibility if there is little or no equity in the home that this can be purchased back. The nominal fee for this is £211 fees and from £1.What will happen to my pension?
Since May 2000 a pension does not normally form part of the bankruptcy estate providing the pension is Inland Revenue approved.What will happen to my life policy?
Life policies form an asset in the bankruptcy estate and on the date of the order the beneficial interest in this policy. As a result the trustee in the bankruptcy may sell or surrender any policy with a value for the benefit of the creditors. However, you do have an option to purchase this interest back from them, and this would be for a nominal fee. This would be discussed at the Official Receivers interview.How long does bankruptcy last?
Under new bankruptcy laws introduced on 1st April 2004 the statutory period for a bankruptcy was reduced from 3 years to 12 months. During the 12 months you are subject to the restrictions of the bankruptcy. Also introduced in 2004 was the chance for early discharge, this is given when there is no investigation needed further into your affairs and where you have co operated fully with the Official Receiver. This is given at his discretion and therefore you could be discharged in 6-12 months.Will I have to pay anything to my creditors while I am bankrupt?
During the period in which you are an un-discharged bankrupt you may be asked to make payments to your creditors by way of an income payments agreement. This is a flexible agreement in which you pay a percentage of your surplus income back to the Official Receiver for the benefit of your creditors. This is worked by taking your essential expenditure and also further expenses allowed in bankruptcy but not in an IVA. From this if there is a surplus of more than £100 in surplus the Official Receiver will take a percentage of this. The percentage they take depends on the size of the surplus the more surplus you have the more they will take. The Official Receiver however does not take more than 70% at the most. When you are made bankrupt if you are working you will also notice that your tax code will change to a “NT” code. As a result of this you will be paid your gross pay and not your net pay minus tax. The reason behind this is that the Official Receiver and Revenue and Customs have agreed that during the period of the financial year that you are bankrupt in you should make the payment of the tax to the Official Receiver; this is then paid to your creditors. There will be an agreement to pay this to the Official Receivers agents. So do not spend this extra money as it would have to be repaid!!!What happens if I earn more or less money and I am subject to an IPA?
If your income changes during the time in which you are subject to an IPA, then you will need to inform the Official Receiver. As the title says this is an agreement and as a result this can be changed. If you income increases you maybe required to make more payments to the Official Receiver, however if this income reduces the IPA can be reduced or in certain circumstances cancelled.Is my employer informed?
In most cases your employer need not be informed; however certain jobs hold bankruptcy restrictions and would advise that you obtain information from your contract or HR department to whether a bankruptcy will affect your employment.I am worried that my name will appear in the local paper.
Until recently the name and address of everyone in your area who had gone bankrupt would be published in your local paper. However, following the introduction of the Insolvency Amendment Rules 2009 (effective 6th April 2009) your name would not appear in the local paper apart from exceptional circumstances. The Official Receiver is only allowed to advertise based on the following rules –Will I be able to have a bank account ?
There is absolutely no restriction in law regarding having a bank account through the bankruptcy process. The reality is that after to you get your bankruptcy order, the Official Receiver will contact your bank and they may freeze your account for a period of time (usually just a few days). After this your bank would normally allow you to continue with a basic account. However, if your bank no longer wishes to have your business then you will be given your money back and can open an account with another bank that has no restriction on customers going through bankruptcy.But I’ve heard that bailiffs come to my home if I go bankrupt
It is true that years ago bailiffs would come to your home to take your possessions when you got a bankruptcy order. Fortunately this is now history. Since the introduction of the Insolvency Act 1986 that outlines most of the legislation in modern bankruptcy there is a comprehensive section on Exempt Property, this is covered in section 283(2). Basically ‘exempt property’ covers all the things that are not considered as part of the bankruptcy estate, this essentially includes all of the usual things that you have in your home such as clothing bedding, furniture and general household equipment.Will I lose my car ?
If you need your car for work or to get to and from work and the trade value is less than £2,000 then your vehicle would usually be exempt from the bankruptcy estate. This is also covered in Section 283(2) of the Insolvency Act 1986. Even if the value exceeds £2,000 then an arrangement can be made with the Official Receiver for you to keep it providing a third party can pay the difference between £2,000 and the trade value, or the vehicle would be collected and sold and you could be given £2,000 to purchase a replacement. A vehicle on finance is usually exempt as well providing that the finance company is in agreement and that there is more to pay on the finance than its value.I am really worried about going to court
Attending court to present your bankruptcy petition is dealt with as a civil matter and is handled at your local County (or Combined) Court, not a Magistrate Court. The usual process is as follows (it varies slightly from court to court) - You are not in front of a judge and jury, you just pay your court fee and meet with a court clerk to swear an oath to confirm that your petition is truthful. You then wait whilst the clerk takes the paperwork to the judge for approval (it is unlikely that you will see the judge yourself). You speak to the Official Receiver for a few minutes (normally by phone) to schedule a telephone interview in a few days time when the OR has had chance to review your case. There is absolutely nothing to fear as all the court staff have a duty of care towards you and regarding your circumstances.Surely I’ll never be able to get credit again
It is true that bankruptcy negatively affects your credit score but you probably have a low credit score anyway. Once you are discharged from bankruptcy, (the statutory period is 12 months but many people are discharged after just 6 months), you are free to rebuild your credit score. This can be achieved by any positive financial activity that will improve your credit rating for example a credit/debit style pre-paid card with a ‘creditbuilder’ facility. After 3 years you should be able to get credit cards and a mortgage.What if I go to court and my bankruptcy is refused ?
When you go to court, you are effectively declaring yourself legally and financially bankrupt. Providing your paperwork (i.e. the Statement of Affairs/Debtor’s Petition) is in order and your circumstances fit the criteria for bankruptcy, then a bankruptcy order will be granted. The Official Receiver will then deal with your affairs and contact your creditors to inform them that your debt is written off.I am a property owner. Will I lose my home ?
If you have equity in your property then the Official Receiver will allow a third party to purchase the beneficial interest, put a charge on the property or will apply for possession and sale. However, if you are in negative equity then there is a set fee of £1 (plus a nominal legal fee) that can be paid and you can then keep your property and continue to pay your mortgage. For more info see ‘What will happen to my home’