Bankruptcy Orders

By: Toney casey

A Bankruptcy order may be made against you by the Court following the filing of a Bankruptcy petition. This petition may be filed by any creditor owed more than ?750 (a Creditor's petition) or alternatively you yourself may ask the Court to make a Bankruptcy order against you (a Debtor's petition).

Once a Bankruptcy order is made you will lose control of your assets, which (subject to certain exemptions) will be sold to raise funds for your creditors. Most worryingly, this includes any equity which you may have in your family home which may be realised through a sale of the property by the Trustee in Bankruptcy - even if the house is jointly owned. In order to avoid this unpleasant situation, many people will consider an Individual Voluntary Arrangement (IVA).

"In most cases the Bankruptcy ends after one year and, subject to certain exceptions, you would be free of your liabilities and your creditors can make no further claim against you. However, any payments required to be made from your income will continue for three years."

After the Bankruptcy order has been made you will generally be required to make payments from your income to your Trustee in Bankruptcy (the person appointed to administer your bankruptcy). These payments will generally continue for a period of three years. Also, if you come into any money during the Bankruptcy, such as an inheritance or a lottery win, you will be required to pay this into the Bankruptcy trust for the benefit of your creditors.

Whilst Bankrupt, an individual is subject to a number of restrictions. For example, professionally qualified people such as an accountant or solicitor may be unable to practice and company directors would be unable to hold office during the course of the Bankruptcy. Such individuals would usually seek to enter into an IVA.

In most cases the Bankruptcy ends after one year and, subject to certain exceptions, you would be free of your liabilities and your creditors can make no further claim against you. However, any payments required to be made from your income will continue for three years. Additionally, the details of your Bankruptcy will be held on file with credit reference agencies and other bodies. This means that for a considerable period of time after the Bankruptcy it would be difficult and/or very expensive to obtain any form of credit, including a mortgage.

Remember

The implications of Bankruptcy are very serious and an individual should always take professional advice should they be faced with Bankruptcy, or are considering a Debtors petition as an option to deal with their financial problems.

Bankruptcy
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