Bankruptcy

According to a recent survey, bankruptices are on the rise! In England and Wales the number of bankruptcies has reached a high of 10,091. This is 24.5% higher than the year before! Total individual insolvencies reached 13,229 in England and Wales during the first quarter.

What is bankruptcy?

If you are in debt and you are struggling with excessive debts that you cannot pay with your assets or cash, you can file for a court order which allows you to decalre yourself Bankript, thereby freeing you from these debts. If you owe someone money and have failed to pay them for an extended period, they can file to declare you Bankrupt. There are two main ways in which you are declared Bankrupt:

a) You can declare yourself bankrupt, simply contact your local court and they will advise you on the county court that deals with Banruptcies. The irony of it is that you have to pay a fee of £150 to the court and a further payment of £325 as a deposit.

b) Or if you owe more than £750, they can petition to the County court to declare you Bankrupt

The alternative to Bankruptcy is IVAs (Individual Voluntary Arrangements:

This is an agreement that allows debtors to reach an agreement with creditors which avoids the need for people to declare themselves Bankrupt.

Often, on hearing the details of your debt case, our experts will advise you to opt for an Individual Voluntary Arrangement (IVA) 3,139 people opted to go down the IVA route rather than declare themselves Bankrupt.

Who can declare themselves bankrupt?

Anyone basically!. However there are more favourable options available to you such as IVAs explained in brief above. University Graduates are increasingly in debt:

Over 1,000 graduates were faced with declaring themselves Bankrupt last year. Two thirds of the entire popultation in the UK that decalred themselves bankrupt were under the age of 30. Steps to delare yourself Bankrupt:

You can declare yourself bankrupt, simply contact your local court and they will advise you on the county court that deals with Banruptcies. The irony of it is that you have to pay a fee of £150 to the cort and a further payment of £325 as a deposit.
You will be assigned a civil servant who will act as a trustee for your estate. This civil servant will report to your creditors and the court or an Insolvency practioneer such as the debt experts working for debtfreeplease – these are licensed accountants or solicitors who can be appointed as trustee instead of the civil servant.
The following will be informed about your Bankruptcy. Your Bank or building society whenever you open an account, utilitiy companies who will want you to pay in advance for services and your mortgage lender who may repossess your house.
Your trustee will now take control of all your payments to your creditors – the creditors will apply to the trustee and they will be dealt with by the trustee manging your Bankruptcy for you.
You will no longer control your assets, an if you are a company the appointed trustee will usually dispose off your assests to pay creditors. If you have a life assurance policy or a pension, the trustee may use these to reduce your debts.

The disadvantages of bankruptcy

Declaring yourself Bankrupt is a serious matter with disastrous consequences:

You may have to:

Place an advert in the newspaper for everyone to see.
Lose control on the management of your assets.
Close your business and have your employees dismissed.
Lose your major assets such as your home, your car, your insurance policy, your pension etc
Your Bank, utility companies and alike will be informed.
Your Bank account will be closed, your credit cards will be taken away.

Many businesses will refuse to trade with you as a result of you being declared Bankrupt.