What is Bankruptcy?
If you cannot avoid bankruptcy, it's important to know what bankruptcy is and what the consequences are. Bankruptcy will clear your unsecured debts, although it has serious consequences and should be your last resort.
Bankruptcy is a process that allows you to deal with debts you cannot pay. Although the bankruptcy proceedings place certain restrictions upon you they will:
- free you from your debts
- ensure that any assets are shared out fairly among your creditors
A court official called an "Official Receiver" is appointed to administer your bankruptcy. The Official also investigates your affairs to see if you are to blame for your position.
What Happens During Bankruptcy?
The following points give an overview of what will happen.
- You will be subject to bankruptcy restrictions
- You will be discharged from bankruptcy within 12 months
- You may have to accept an income payments agreement
- You may have to accept a bankruptcy restrictions undertaking
- Your assets may have to be sold. This includes your house.
The following sections will help explain what to expect during bankruptcy.
- Effects of bankruptcy
- Consequences of Bankruptcy
- Bankruptcy and your assets
- Do's and Don't's
- Bankruptcy blog
As mentioned in Piggy's bankruptcy blog, bankruptcy is not a course of action that should be taken likely and not all types of debt can be included.
There are many alternatives for people in debt and through bankruptcy advice it may be possible to avoid bankruptcy and deal with the debts in a more appropriate manner.
Who can go Bankrupt?
Any individual can file for bankruptcy, however, there are different insolvency procedures for partnerships and companies.
A bankruptcy order will only be made once a petition has been presented to the court. This can either be achieved by yourself filing bankruptcy (presenting a debtors petition) or by a creditor presenting a petition.
Note: If a creditor has presented a petition against you it may still be possible to avoid bankruptcy. Seek advice as soon as possible.
See Bankruptcy advice.
Who Administers the Bankruptcy?
Once the bankruptcy order has been made the trustee in bankruptcy is either the Official Receiver or Insolvency Practitioner who takes control over your assets. It is the trustee's responsibility to sell these assets and share the proceeds out amongst the creditors.
It is the responsibility of the Official Receiver to administer your bankruptcy and investigate your affairs leading up to and during the bankruptcy.
Bankruptcy Help
If you cannot find what you are looking for here on Piggy's website, the following links may prove useful:
