Bankruptcy FAQs
Questions:
Answers:
- How do I contact Baines & Ernst?
It's easy to contact a Baines & Ernst advisor. Simply call on 0800 294 6312, click the 30 second debt test form at the right of the page or click to contact us about Bankruptcy, Debt Management, IVA’s or other appropriate solution.
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- How do I declare myself bankrupt?
Your creditors may file a Bankruptcy petition (Creditor’s Petition) if you owe them more than £750.
However, in order for you to declare yourself bankrupt you must firstly fill in a Bankruptcy petition (Debtor’s Petition).
Once the petition has been filed, a court date will be set for an initial hearing. This first hearing will decide whether or not a Bankruptcy order should be made.
If a Bankruptcy Order is made, you will be declared bankrupt.
A bankruptcy order can still be made even if you refuse to acknowledge or agree to the order. You should therefore try to co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditors' claims you should try and reach a settlement with them before the bankruptcy order is made: trying to do so afterwards is difficult and expensive.
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- How much will it cost me if I go bankrupt?
If you go bankrupt you may have to pay the following:
- The Court Fee of £150 (if you receive means tested benefits you may be exempt or be able to pay a reduced fee).
- The Official Receiver's Deposit of £450
- The fee of £12 to swear the statement of affairs at a solicitors or High Court.
If you are a married couple and you are both applying for bankruptcy, you will each have to pay separate fees.
Are there any other options?
There may well be options other than Bankruptcy such as a Debt Management Plan or an IVA. Make sure you have sought all relevant information before filing for Bankruptcy as this should be a last resort. For information on your individual case please call our dedicated experts on 0800 294 6312.
You can also view a free publication from The Insolvency Service ‘In Debt? Dealing With Your Creditors’ (www.insolvency.gov.uk/pdfs/guidanceleafletspdf/indebt-web.pdf. ) which provides an overview of some of the debt solutions that may be available.
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- What will happen at Court?
The Court will either hear your petition straight away or arrange a time for the Court to consider it.
If English is not your first language and you need an interpreter, the Court will not be able to help you find one. You will have to do this yourself and pay interpreter's fees.
At the hearing the Court can do one of four things:
1. Stay (delay) the proceedings - often because the Court needs further information before it can decide whether to make a bankruptcy order.
2. Dismiss the petition - perhaps because an administration order would be more appropriate.
3. Appoint an Insolvency Practitioner - if the Court thinks that an Individual Voluntary Arrangement would be more appropriate. This will only be possible if you have not been bankrupt or made an Individual Voluntary Arrangement or Debt Relief Order in the previous five years. If you do not wish to enter into such an arrangement, you should inform the Court.
4. Make a bankruptcy order. You will be bankrupt the moment the order is made by the Court.
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- What are the effects of Bankruptcy?
Until your Bankruptcy is discharged:
- You can't hold certain public offices.
- The trustee controls all of your assets including your home.
- You can only conduct business using the name under which you were made bankrupt.
- You can't form, manage, act as a company director or promote a company without the court's permission.
- In certain circumstances your employment may also be affected. You should check with your Human Resource department
- You may open a new bank or building society account but you should disclose the fact you are bankrupt
- You cannot obtain credit over £250 without permission from the lender
- In certain circumstances your employment may also be affected. You should check with your Human Resource department
- If you live with a partner and/or children then a period of twelve months may be allowed for other living arrangements to be made. At the end of the twelve-month period, the property will almost certainly have to be put up for sale, enforced by a Court order if necessary. If you own the property with someone else they may be able to make an offer to buy out your interest in the property from the Official Receiver.
- Any assets you acquire during your bankruptcy will become the property of the trustee.
After you are discharged from your Bankruptcy:
- The above constraints are ended
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- Your bankruptcy will be registered with credit reference agencies and this will usually stay on your credit file for 6 years.
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- Even after this point, if you apply for a mortgage, you may still have to declare that you were bankrupt.
- Depending on your earnings, your trustee may require you to make contributions to your creditors out of your income. The amount that is paid to creditors is determined by the amount that you can reasonably afford after your normal cost of living expenses have been deducted from your income. This is called an income payments order (IPO), and if applicable it will remain in force for three years from the date of bankruptcy. This means that even though you may have been discharged from your bankruptcy after one year, you will still have to continue paying your IPO for a further two years.
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- What will I have to do if I go bankrupt?
When you go bankrupt you must provide information about your financial affairs- handing over control of your assets, bank statements and insurance policies to the Official receiver.
You could have to go to court to explain why you're in debt.
You are not allowed to make any direct payments to your creditors.
Any bank, building society accounts, credit cards or similar must no longer be used.
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You can keep any tools, books, vehicles (if low value) and other items of equipment needed personally in your employment or business. You will also be able to keep your clothing, bedding, household furniture, basic household items and certain pension entitlements.
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