What are the Court proceedings during Bankruptcy ?
When a bankruptcy petition is filed, the court either hears the petition straight away or fixes a time for it. The court can deal with your petition in any of these four ways:
- Stay the proceedings in order to gather more information before delivering a bankruptcy order.
- Dismiss the petition on the ground that an administration order may be more appropriate.
- Appoint an Insolvency Practitioner if it deems that an Individual Voluntary Arrangement would be more appropriate.
- Issue a bankruptcy order straight away. You become bankrupt the moment the order is passed by the court.
Apart from the above, the court may also issue a certificate of summary administration. This happens when your liabilities are below £20,000 and you have neither been declared bankrupt nor have made an Individual Voluntary Arrangement with your creditors in the previous five years. A certificate of this kind from the court can make the process of your bankruptcy simpler and quicker.
You will be automatically freed or discharged after two years from the date of the bankruptcy order. If the court does not issue the certificate of administration, you may be discharged from bankruptcy after three years from the date of the bankruptcy order.
Who deals with your bankruptcy case after the court issues the order?
The court appoints an official receiver as your trustee. The Official Receiver is a civil servant and also an officer of the court. His duty is to administer bankruptcy cases. He acts as a trustee of your estate and investigates your financial affairs before and during the bankruptcy.
Sometimes a private sector Insolvency Practitioner may also be appointed provided he is a licensed accountant or a solicitor. The Insolvency Practitioner discharges all the duties of the Official Receiver. He disposes of your assets and makes payments to your creditors.
What are your responsibilities when bankrupt?
You should provide all information and documents about your financial affairs to the Official Receiver as soon as you are declared bankrupt. The financial affairs may include a list of your assets such as property, pensions, insurance policies and also the list of your creditors as also the amount that you owe to each one of them. You are required to provide this information within 21 days of being declared bankrupt.
You also need to declare any increase in your assets or income to the Official Receiver. You should not seek a credit of £250 or more from any person without informing him that you are a bankrupt. Lastly, you cannot make any direct payment to your creditors under these circumstances.