IVA.TV – IVA Alternatives – Bankruptcy

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What is Bankruptcy? – Bankruptcy Definition

Bankruptcy

Bankruptcy definition:

Bankruptcy is where an individual is declared insolvent because they have insufficient assets and/or income to adequately repay their debts over a suitable time period.

Bankruptcy can therefore lead to all or a substantial part of your debt being written-off.

Petitioning for your own Bankruptcy (also called Voluntary Bankruptcy)

You can apply to make yourself bankrupt by going to the court within the jurisdiction you live. From there you can obtain and once filled out, return the appropriate form (debtor’s petition). You will have to pay £150 plus a £310 deposit.

The court will also be able to confirm the fee that will need paying. The following link gives further information on how to apply for your own bankruptcy: Bankruptcy Guide

You are always recommended to seek professional advice before petitioning for your own bankruptcy in order to have the implications fully explained and to look at bankruptcy alternatives. We can advise on the suitability of petitioning for your own bankruptcy.

Creditor Petitioned Bankruptcy (also called Involuntary Bankruptcy)

A creditor (someone you owe money to) normally through a solicitor can petition to make you bankrupt if you have defaulted on repaying a debt to them. This process will normally cost the creditor a minimum of £1,500.The creditor must be owed a minimum of £750.

Being Discharged from Bankruptcy

If the bankruptcy order was made on or after 1 April 2004 the automatic discharge date is one year. You have to write to the court where you were adjudged bankrupt quoting your most recent case reference. There is a court fee of £60. Despite being discharged a bankruptcy order will be kept on credit reference agency files for six years from the date the order was made.

Bankruptcy Register (also called a Bankruptcy List)

A Bankruptcy is recorded in a Bankruptcy register (The Individual Insolvency Register is the Public Record of Bankruptcies and Individual Voluntary Arrangements).

Insolvency.gov.uk provides useful additional information re the Register.

It is possible to search the Bankruptcy Register online.

For someone to find you on the Bankruptcy Register they would have to search for you by name.

The Register includes Bankruptcies that are current or have ended in the last 3 months, Current IVAs and Current Bankruptcy Restriction Orders and Undertakings. An entry shows Bankrupt’s Name, Occupation, Date of Birth, Last Known Address and Insolvency Case Details.

People can also search the Bankruptcy register at their local Official Receivers Office.

Bankruptcies are also listed in the London or Belfast Gazette publications which are produced mainly for the benefit of creditors who can then make a claim if one of their customers is listed.

One big disadvantage of Bankruptcy is that it is also advertised in your local Newspaper so it is highly probable people you know will find out.