BankruptcyBankruptcy is a legal process resulting in a 'Bankruptcy Order'. Once such an order by the court has been made a trustee will control your assets, oversee your finances and any further interest and charges on your debts will be frozen. Anyone can go bankrupt, including individual members of a partnership. It is very costly and difficult to get a bankruptcy order reversed. You can be made bankrupt:You can apply for bankruptcy yourself or your creditors can petition for your bankruptcy. The main advantage of doing it yourself is control over timing, although there are court costs to pay. A bankruptcy order can still be made by your creditors even if you refuse to acknowledge or agree to the proceedings. If made bankrupt, it is in your best interests to co-operate fully with your trustee, who will undertake a full investigation into your finances. Your bankruptcy will be advertised in at least one newspaper. Whilst bankrupt you must disclose your bankruptcy to a lender if you wish to obtain any credit greater than £500 (figure quoted correct at current time). You will also lose control of your assets - so your house and other valuable possessions are at risk. You will usually be discharged from bankruptcy after one year. When discharged, you are free from any bankruptcy restrictions, for instance you are able to borrow money without having to disclose your bankruptcy and can carry on business in any name. Your trustee can, however, 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 therefore you will still be responsible for paying these debts. If you own your home, it may have to be sold to repay your creditors. It may be possible for the sale of a property to be postponed for a year, particularly if you have children or a partner living with you. Your trustee would explore any alternatives, such as your partner or family buying your share in the home from the trustee. 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 a Local Authority Councilor, for example. For more information visit the link below: http://www.insolvency.gov.uk/bankruptcy/whatisbankruptcy.htm In Summary:
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Bankruptcy is a ruling made by the courts known as a "Bankruptcy Order"