Bankruptcy is a way for individuals to deal with debts they cannot pay. It allows individuals make a fresh start free from debt.
Someone who is adjudged bankrupt has the Official Receiver appointed as their trustee in bankruptcy. The trustee’s role if to realise their assets and distribute them between the creditors.
A bankrupt is automatically discharged from bankruptcy after 12 months unless restrictions are extended. Restrictions include, but are not limited to, being unable to obtain credit of more than £500 without disclosing they are an undischarged bankrupt, being unable to be a director of a limited company and having to disclose your income and expenses to the trustee to ascertain whether an income payments agreement can be setup.
As a bankrupt you are still allowed to operate a bank account, run a business (but not a limited company), own a car (subject to financial limits and if required for work purposes) and earn a living.
Bankruptcy often has much wider implications where there is a family home and dependent children living there.
Bankruptcy can be quite stressful and daunting for those that have no experience of it.
Contact us if you would like further information and assistance regarding bankruptcy. There is no charge for doing so and it is without obligation.