Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts.
How Oliver Elliot can help:
- Explain to you the process.
- Help you with your interview by the Official Receiver.
- Assist you to answer the Official Receiver’s bankruptcy questionnaire.
- Negotiate for you with your Trustee in Bankruptcy.
- A caring and responsive approach.
Contact us for a no obligation consultation
We have more than twenty years insolvency experience, resolving challenging financial circumstances for individuals. Contact Us for a Free Initial Consultation.
020 3925 3613 / email@example.com
What is bankruptcy?
A creditor owed at least £5,000 may issue a bankruptcy petition to the Court. This is known as a Creditor’s Petition.
If the debt remains unpaid the Court may grant a bankruptcy order against the person. Once such an order is made, a Trustee will be appointed who will realise the bankrupt individual’s property and distribute the proceeds to creditors. A person is discharged from their bankruptcy normally after a 12 month period and their liabilities after effectively extinguished.
However, an individual who has been declared bankrupt is required to cooperate with the Trustee by virtue of Section 333 of the Insolvency Act 1986 and if that is not the case then the automatic discharge from bankruptcy restrictions (such as obtaining above certain levels of credit without notice of bankruptcy) can be suspended.
Does someone need to wait for Creditors to make them bankrupt?
An individual can voluntarily take action and petition for their own bankruptcy. This is known as a Debtor’s Petition. Before taking such steps, professional advice should be sought from an Insolvency Practitioner and the consequences given serious consideration.
If you have very little in the way of assets and the amounts owed to your creditors is below £20,000 you can potentially avoid bankruptcy altogether. You may be able to apply for a Debt Relief Order which will give you an opportunity to restructure your finances. There are certain restrictions, for further details please contact us to consider your situation. You can in any event refer to them in Part 7A of the Insolvency Act 1986.
What are the alternatives to bankruptcy?
If you have very little in the way of assets and the amounts owed to your creditors is below £20,000 you can potentially avoid bankruptcy altogether. You may be able to apply for a Debt Relief Order which will give you an opportunity to restructure your finances. There are certain restrictions, for further details please contact us to consider your situation.
Alternatively, you might be able to enter into an Individual Voluntary Arrangement (IVA); a contract with your creditors to avoid going bankrupt. Speak to us if you would wish to see if you are able to enter into an IVA.