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There is a stigma associated with bankruptcy in the
UK that is completely out of step with the view taken in
western Europe or in the US.
Here we try to debunk the myths and explain how we
may be able to help you recover after you reach the
stage where you or your company may be insolvent.
Back to main
Insolvency & Bankruptcy page
Insolvency is the inability of an
individual, business or other entity to pay debts when
they are due.
Bankruptcy is the process that
allows an individual, business or other entity to
legally declare its inability to pay creditors.
In many countries filing for bankruptcy is considered
a positive step towards dealing with insolvency allowing
an individual or company directors to recover their
status and get on with the rest of their lives.
Bankruptcy can be a process that provides a second
chance - it is not the final nail in the coffin. Nor is
it something to be taken lightly.
A few key points:
1) You do not necessarily have to become bankrupt
just because you are in debt. There are a few viable
options that you should carefully consider namely
Individual Voluntary Arrangements (IVA's) and
debt rescheduling.
2) If you have received a petition or have decided to
file for bankruptcy then you should seek advice from
someone qualified to help you - an
insolvency solicitor would be a good option.
3) Bankruptcy petitions are made in the local county
courts (High Court in London).
4) Once a Bankruptcy Order has been made this will be
published in the local press. This can cause anxiety for
the bankrupt but is designed primarily to communicate
the order to potential or actual creditors.
5) The Official Receiver (OR) has the job of
administering your bankruptcy and protecting your assets
from the date of the order.
6) The Official Receiver will review your financial
affairs and report to Court. They also act as the
intermediary with known creditors. If preferred a
licensed Insolvency Practitioner (IP) can act instead of
the Official Receiver.
7) When a Bankruptcy Order has been made against you:
- You must cooperate fully and comply with any
requests from the Official Receiver or the insolvency
practitioner concerning your financial affairs.
- You must provide details of all known assets and a
list of creditors (people to whom you owe money) - You
must stop using your bank account or similar account
straight away
- You must not make payments to your creditors
outside of the arrangements agreed upon during the
proceedings.
- You will no longer control your assets.
- You can usually retain items such as tools of
trade, vehicles and equipment used for employment.
Clothing Bedding furniture and items you / your family
need in the home.
Useful resources
http://www.cccs.co.uk
http://www.citizensadvice.org.uk
http://www.insolvency.gov.uk
http://www.insolvency-practitioners.org.uk
http://www.insolvencypractices.org.uk
http://www.bankruptcyadvisoryservice.co.uk
http://www.moneybasics.co.uk
http://art.com
Bankruptcy & Debt related news in the UK
Personal Injury Claim Reform - read about the
forthcoming reforms and how they are likely to affect
the industry in England & Wales[15 August 2007]
Banks agree to Office of Fair Trading "test" case being
heard by the courts on overcharging [27th July 2007]
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