Debt and Bankruptcy
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We play a crucial role in guiding individuals through the complex process of bankruptcy, which involves the liquidation of assets to settle outstanding debts.
We play a crucial role in guiding individuals through the complex process of bankruptcy, which involves the liquidation of assets to settle outstanding debts. Having a solicitor on hand can help you simplify the legalities, organise paperwork, and explore options like debt relief. With our guidance, you can navigate the process more smoothly, protect your rights, and safeguard your assets.
Our goal is to advise you on the best course of action based on your unique circumstances, offering a comprehensive approach to help alleviate the challenges associated with debt.
Bankruptcy is a legal process that helps people get a financial fresh start by relieving them from repaying all their debts, depending on their situation. When you're bankrupt, there are rules you must follow, like not borrowing too much money, not running a company or being a director, and being careful with business names and certain jobs. Breaking these rules is against the law.
Usually, people choose to go bankrupt, but if you can't repay your debts, creditors can also ask the court to make you bankrupt. You might also have to make payments towards your debts during and after bankruptcy.
You can be made bankrupt for three main reasons: if you can't pay your debts and apply for bankruptcy, if someone you owe £5000 or more applies to make you bankrupt, or if you break the terms of your debt arrangement. When you're made bankrupt, a trustee, usually the Official Receiver, takes control of your assets to manage the bankruptcy process.
When you're declared bankrupt, there are certain restrictions that you must adhere to. These restrictions are put in place to regulate your actions during the bankruptcy process and ensure that you fulfil your obligations. Here are the key restrictions you need to be aware of:
Borrowing limit: You are not allowed to borrow more than £500 without informing the lender that you are bankrupt. This restriction is in place to prevent you from accumulating further debt without disclosing your financial status.
Directorship: Without obtaining permission from the court, you cannot act as a director of a company during your bankruptcy. This restriction is intended to prevent individuals from taking on significant managerial responsibilities that could potentially impact the financial affairs of a company.
Company management: Similarly, you cannot create, manage, or promote a company without prior permission from the court. This restriction aims to prevent individuals from engaging in activities that could lead to financial liabilities or conflicts of interest during bankruptcy.
Business management: If you operate a business under a different name, you must disclose your bankruptcy status to the parties you conduct business with. This requirement ensures transparency and prevents misleading practices.
Insolvency practitioner work: You are prohibited from working as an insolvency practitioner, which refers to being an authorised debt specialist who manages financial matters for others. This restriction is in place to prevent potential conflicts of interest and ensure the integrity of insolvency procedures.
It's crucial to understand and comply with these restrictions to avoid legal complications and ensure a smooth bankruptcy process. Failure to adhere to these restrictions may result in further consequences and prolong the bankruptcy proceedings.
If you're dealing with bankruptcy, a solicitor can be a great help. They know the ins and outs of the legal process, making sure all the paperwork is in order. They can also guide you on options like debt relief and talk to your creditors. Having a solicitor by your side can make going through bankruptcy a bit easier and ensure your rights and assets are protected.
We offer assistance if you're experiencing cash flow issues, struggling to meet debt payments, facing claims from creditors or the Inland Revenue, dealing with a Bankruptcy Petition, or if your family member's debts pose a threat to your assets.
At GloverPriest, we provide friendly and transparent advice. If you would like further advice on debt or insolvency matters, please don’t hesitate to speak to one of our expert solicitors today. Complete our enquiry form.
Dealing with debt can be incredibly stressful, especially when faced with legal actions such as County Court Judgements, Statutory Demands, or Bankruptcy Orders. Solicitors understand these challenges and are there to guide you through financial difficulties while providing a defence against legal proceedings. Solicitors are skilled in negotiating repayment plans with creditors, whether through informal agreements or more formal arrangements like Individual Voluntary Arrangements (IVAs).
Before choosing bankruptcy, it's important to get free and unbiased debt advice to make sure it's the right solution for you.
You can apply for bankruptcy online by paying a fee. The Adjudicator, employed by the Insolvency Service, will then assess your application and decide whether to approve it within 28 days. If approved, you usually become bankrupt on that day.
After bankruptcy, a trustee is appointed to manage your assets. The trustee can use these assets to pay your creditor. The Official Receiver, your initial trustee, will contact you with instructions and may conduct an interview either in person, over the phone, or via video call to discuss your situation. Cooperation is crucial, as failure to attend could lead to an extended bankruptcy period.
The Official Receiver manages your bankruptcy, notifying your creditors about your status, therefore removing the need for direct dealings between you and them.
Discharge marks the formal end of bankruptcy restrictions, typically occurring 12 months after the bankruptcy order. However, failure to fulfill duties may extend this period. Once discharged, your bankruptcy restrictions are lifted, and most debts are forgiven. Your credit record retains details of the bankruptcy for up to six years, and any agreed or required payments may continue for up to three years.
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