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  • Bankruptcy


    A Debtor can be made Bankrupt by their own petition to the Court or by that of a Creditor who is owed in excess of £750.

    The effect of a Bankruptcy Order depends on the personal financial situation of the Debtor.  For those with limited or no significant assets, Bankruptcy is often a release from the burden of high borrowings, with the debt being written off.

    For those with assets however, the effect of Bankruptcy can be quite severe, with all assets vesting automatically in the Official Receiver or Trustee in Bankruptcy (if appointed). Therefore, people with assets, typically explore IVA’s as an alternative to Bankruptcy.

    It is the responsibility of the Official Receiver or Trustee in Bankruptcy to realise the Bankrupt’s assets for the benefit of the general body of creditors.

    Key Facts:

    • The Bankrupt’s assets automatically vest in the Bankruptcy estate.
    • Any windfalls or assets acquired post-bankruptcy and before discharge vest in the estate.
    • The Bankrupt may become subject to an income payments agreement meaning he/she has to contribute a percentage of his/her future income into the bankruptcy estate for a maximum period of 3 years.
    • Discharge from bankruptcy occurs after twelve months, unless the Official Receiver applies to Court objecting to the automatic discharge.
    • Some professions do not allow members who have been or are Bankrupt.
    • Certain fees are charged on realisations in bankruptcy which reduces the amount available to creditors.
    • A Bankrupt cannot be a Director of a Company.

    How we can help:

    • We will arrange a free initial consultation with the Debtor or Creditor to discuss the options available to them.
    • Explain the process in details and answer any questions or concerns.
    • From a Creditor perspective, can assist in debt collection and manage the process to their advantage.