Important Bankruptcy Facts
If you are unable to pay off your debts due to financial constraints, you may be faced with the prospect of bankruptcy. If you need any advice or help, you may contact the UK Insolvency Helpline at 0800 074 6918. It is a 24-hour helpline and remains available all the year round including public holidays. This is the largest bankruptcy help line in UK and from here you can get answers to all your questions on all aspects of bankruptcy.
Dealing with bankruptcy is never easy considering the stigma attached to it not to mention the penalties associated. Given the circumstances, it can be an emotionally traumatic situation.
You may also stand to lose your home and any equity that you have in it. The issue of bankruptcy is a very complex and is governed under the UK insolvency legislation. Bankruptcy is defined in England and Wales by the Insolvency Act and Enterprise Act.
The bankruptcy law has recently been amended. The bankruptcy period has now been reduced from three-year period to one year only. There are Bankruptcy Restriction Orders (BROs) for some bankrupts. If you are a bankrupt, you can face public examination in the court, but you cannot normally be sent to prison.
Bankruptcy is rarely an easy way out of your financial quagmire. Therefore, you should explore every alternative to bankruptcy. One possibility is that you can opt for an IVA or Individual Voluntary Agreement that allows you to pay off your loans in installments over a fixed period of time, provided your creditors agree to this arrangement. If nothing else works out, it is best to take legal help.
If you decide to opt for bankruptcy, you will need to go to the Bankruptcy Court and fill court forms such as forms 6.27 and 6.28. You will need to pay £450.00 as bankruptcy costs but you may claim a reduction of £130.00 under certain conditions. If you are already a bankrupt, you may request for the cancellation of bankruptcy order.
Bankruptcy has its consequences. For example, if you want to borrow £250 or more, alone or jointly with another person, you will need to disclose your bankruptcy status to the lender. Then again, you cannot enter into any business directly or indirectly in any name other that under the one which you were declared bankrupt. Besides, you are not allowed to form, promote or manage a company without the prior permission of the court.