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BankruptcyNews
Junior Member
358 Posts |
 Posted - 21 February 2007 : 13:18:49
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The best way to go bankrupt
AROUND 30,000 people go bankrupt in the UK every year. But what is bankruptcy? Is it the best option for everyone, and what's the best way to go about it?
What is bankruptcy?
1. Any individual who cannot pay their debts can file for bankruptcy.
2. If you go bankrupt, your assets will be distributed among your creditors (people you owe money to) freeing you from pressure and enabling you to make a fresh start.
3. The process can take place voluntarily (at your request) or involuntarily (at the request of the creditor).
3. If you become bankrupt you lose control of your assets, you need to disclose your bankruptcy to obtain credit over £250, and your credit rating is zero for at least six years.
4. If you're bankrupt you cannot be a company director, chartered accountant or lawyer, or hold certain public offices. You need permission from the court to start a business and any businesses you already own will be closed.
5. Bankruptcy is heard in court and publicly advertised.
6. A person can be discharged (no longer considered a bankrupt) in as little as one year.
Alternatives to bankruptcy
1. An Individual Voluntary Arrangement (IVA) is a formal and legally binding arrangement between you and your creditors. It can be based on a lump sum or regular monthly payments, and can last between three and five years. Unlike bankruptcy, it can safeguard your assets to a certain extent.
2. An Informal Arrangement can be reached with your creditors to pay back what you owe - but it can be difficult to get everyone to agree to the terms of this arrangement.
3. Debt Management Plans can be obtained through several agencies who will negotiate reduced payments with your creditors - but beware of those who try and charge you fees.
4. An Administration Order is possible if you owe more than £5,000 in total to two or more different creditors and you have a County Court judgement against you. To go through with this court-monitored arrangement, you need to get Form N92 from your local County Court Office.
Best ways to go bankrupt
1. Consult a solicitor, qualified accountant or authorised insolvency practitioner. You should also talk to an independent financial adviser (see link at top of page).
2. You need to complete a petition and statement of affairs, available at County Courts that deal with bankruptcy or online at The Insolvency Service's website, www.insolvency.gov.uk
3. Once you've completed the forms, you will need to print them and take them to a County or High Court. If you run a business you will need different forms available from your local court.
4. It should cost you around £460 to go bankrupt, including court fees, administration costs and the fee to swear the affidavit (the fee only applies in a High Court or before a solicitor). If you are a married couple declaring bankruptcy together, you will need to pay separate fees.
5. The Court will decide one of four things: to delay the order so more information can be gathered; to dismiss it because other options would be more suitable; to appoint an insolvency practitioner because an IVA (see above) would be more appropriate; or to grant the order.
6. If the bankruptcy order should not have been made, if you've reached an IVA (above) or if your bankruptcy debts and fees and expenses of the bankruptcy hearing has been paid in full or guaranteed, you may get the bankruptcy reversed or annulled. This can be done at any time by obtaining a form from the court dealing with your bankruptcy. Do this before the hearing or you will have to pay all fees and expenses.
SOURCE: THE SUN MONEY REPORTER
January 29, 2007
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The best way to go bankrupt
