BANKRUPTCY

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Banckruptcy can be applied for by an individual or against an individual (by their creditors) when they are no longer able to pay any debt they owe and that debt amounts to more than £750.00.

When you apply for bankruptcy, you will be in effect handing over all your remaining assets to a trustee (usually a licensed Insolvency Practitioner or an Official Receiver who will be appointed by the court) who will then see that all creditors get as much of the money they are owed as possible from the assets of the individual.

The main benefit of bankruptcy for the individual being that at the end of the proceedings the individual becomes completely free of all their debts and their creditors are no longer able to pursue them for any money owed as all payments to the creditors become the responsibility of the trustee.

There are however quite a few drawbacks. The main one being the obvious problem that everything the individual owned can now be seized by the Official Receiver for payment to the creditors.

This includes any
  • Cash Savings

  • Investment Policies

  • General household items

  • Commercial Assets

  • Property

If this includes a family home it is usual that a twelve month period will be given for alternative accommodation to be found but almost inevitably the property will be required to be sold. In the event that the property is owned by more than one individual (as in a family home owned by a couple) the option will usually be given for the second person to buy out the individuals interest in the property from the Official Receiver.

There are also certain restriction placed upon those who have been made bankrupt. Some of these include the inability to become a company director, member of parliament, civil servant or JP. Becoming bankrupt will affect your ability to obtain credit again in the future.

Bankruptcy should be seen as a last resort and not a quick fix for financial problems. If you are struggling with debt and require advice please email us at enquiries@comparepropertybuyers.co.uk.