If You Dont Live In England Or Wales
You can declare yourself bankrupt in England or Wales if you live outside the UK, provided you lived in England or Wales or have had a business there at some point in the last three years. The Bankruptcy Order made in England and Wales may not be recognised in other countries outside the UK.
You cant declare yourself bankrupt in England or Wales if you live in Scotland or Northern Ireland.
How Your Creditors Are Paid
The official receiver will take control of your assets unless an insolvency practitioner is appointed. An insolvency practitioner is usually an accountant or solicitor.
The person who takes control of your assets is known as the trustee. The law says you must cooperate fully with them.
The trustee will sell your assets and tell the creditors how the money will be shared. Creditors must then make a formal claim. You cant make payments directly.
If you have assets, money from the sale of these will be used to pay the costs of the bankruptcy process before creditors are paid. If your case is administered by the official receiver the following fees will all be deducted from the money realised:
- an administration fee of £1,990 if you applied for your own bankruptcy or £2,775 if someone else applied
- a general fee of £6,000
- 15% of the total value of assets realised
- a fee charged at an hourly rate where money is paid to creditors
If there are insufficient assets in your case the official receiver will still process your bankruptcy.
Next, money will be used for:
- certain debts in relation to employees, if you had any
- your other creditors
- interest on all debts
Any money left over will be returned to you. If everyone is paid in full you can apply to have your bankruptcy cancelled .
Used Law To Protect Interests
Critics have cited the Trump corporate bankruptcies as examples of his recklessness and inability to manage, but the real estate developer, casino operator, and former reality-television star says his use of federal law to protect his interests illustrates his sharp business acumen.
Trump said in August 2015:
“I have used the laws of this country just like the greatest people that you read about every day in business have used the laws of this country, the chapter laws, to do a great job for my company, my employees, myself and my family.
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What Do These Bankruptcy Statistics Mean To You
They say that if you remove bankruptcy from business, its like viewing Christianity without hell. As a business owner or investor, it is important to note that bankruptcy isnt always the end of the line for your firm. With so many old and new reasons why businesses and individuals file for bankruptcy, we should set our eyes more on the vast opportunities it brings.
With the current coronavirus pandemic, the challenge to succeed, remain relevant, or simply to stay afloat have never been more demanding. Nonetheless, while some organizations are striving to adapt to the changing business landscape, others see the chance for a new start.
After your debts are relieved or afforded some level of repayment, you should take the opportunity to make things better than before. For instance, many business owners are leveraging the power of technology to help them more efficiently adapt to the changing business landscape. Business solutions like ERP platforms, accounting systems, and budgeting applications can prove to be indispensable as you resume operations, especially in this highly-volatile market.
The Fall Of Bankruptcy Filings
Consecutive double-digit declines were the norm for 2015 and a few years prior every reporting period since December 2011, the Administrative Office of the U.S. Courts reports.
Comparing 2016 to 2015 filings through Dec. 31, overall filings decreased 5.9 percent, while terminated cases decreased 7.1 percent and pending cases decreased 8.1 percent.
Those seeing the largest decrease in the amount of bankruptcy filings over 2015 numbers were those filing in the 9th Circuit covering California, Arkansas, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon, Washington, Guam and the Northern Mariana Islands with 9.9 percent fewer cases. Meanwhile, the individual District with the largest decrease was in the 11th Circuit: Southern Florida recorded just over 18,000 bankruptcy filings in 2016, which was 22.3 percent fewer filings than 2015.
You can find more details of 2016 bankruptcy filings by county here.
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Politicians Who Have Filed For Bankruptcy
Jeff Rose, CFP® | September 03, 2021
Debt and the prospect of bankruptcy is a thought that crosses the mind of nearly all Americans at some point.
But rarely do we think political leaders have the money woes of the common man. Think again!
Some of the countrys most famous politicians found themselves mishandling their finances and ended up filing different kinds of bankruptcy.
Bankrupt Politicians
Many politicians from the 18th century to the new millennium have filed for bankruptcy. Heres a look at some of the most notable cases.1. Thomas Jefferson
One of the nations Founding Fathers and its 3rd president had financial troubles. Thomas Jefferson did not manage his money well. He incurred debt building his plantation home, Monticello, and furnishing it with books, fine wines, artwork, silver, and furniture bought on credit. Even after his death, his estate was riddled with so much debt that it had to be sold off in order to pay creditors.
2. Benedict Arnold
The Revolutionary War was not good to Benedict Arnold in many ways. Aside from being branded a traitor to his country, Arnold went bankrupt after the revolution, which caused him tremendous worry about his reputation.
3. Abraham Lincoln
4. William McKinley
5. George McGovern
What Happens When You Are Declared Bankrupt
A Bankruptcy Inspector from the ISI will serve you with a copy of the Orderof Adjudication and Warrant of Seizure. The Inspector willalso give you a form to complete, requesting various details, which the ISIwill use to contact you and process your bankruptcy.
Your bank accounts will be frozen, except for one current account in whichyou can keep a balance of up to 1,000 for general living expenses.
The ISI will contact all financial institutions and inform them that youhave been made bankrupt.
As soon as your bankruptcy starts, you are free of debt. The OfficialAssignee now owns your assets and administers your estate. Your creditors canno longer seek repayment directly from you. They must deal directly with theOfficial Assignee and all correspondence should be forwarded to him.
You must contribute any surplus income to the Official Assignee.
Your name will appear in the Bankruptcy Register, which is kept in the Officeof the Examiner of the High Court. Anyone can check this register.
Read more in the ISIs guide Afteryou are made bankrupt .
Income
The Official Assignee will negotiate an Income Payment Agreement or seek anIncome Payment Order for the surplus of your income over the reasonable livingexpenses for your situation, based on the ISIsguidelines. The agreement or order will last up to 3 years. Act 2015 reduced this period from 5 years, with effect from 29January 2016.)
No deductions will be made from social welfare payments.
Assets
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Here Is Exactly Why People Who File Bankruptcy Are Smart
I seem to spend a lot of time educating people that most everything they know about bankruptcy is just plain wrong. In fact a friend of mine just told me they were going to file bankruptcy and my answer was, “congratulations.”
You see, even studies by the Federal Reserve Bank of New York have come to the same conclusion I have people who file bankruptcy do better financially than those who don’t.
Today the biggest financial calamity looming ahead of 50 percent of people is not their immediate debt but the failure to set sights further down the road and look at the retirement crisis to come. Putting off dealing with your debt can cost you the very money you will need to retire and be able to afford to eat and live even just a moderate life. If you want to see what limping along in a failed debt relief strategy will cost you, use my online calculator.
Bankruptcy is not a moral decision. It is a legal choice made when the debt situation is hopeless. I am certainly not recommending bankruptcy as a casual solution and I’ve seen very few people who use it that way. In fact the percentage of people who file bankruptcy more than once is very small, that is unless you are a Donald Trump enterprise. They’ve filed four times.
If you’ve decided to move ahead with bankruptcy then here are some good tips shared with me by Rick Abelmann, a bankruptcy attorney in Hawaii.
Chapter 7 V Chapter 13 Bankruptcy Statistics
The Administrative Office of the U.S. Courts makes bankruptcy filing data available monthly, quarterly, and annually. Across the country, about 62.4% of personal bankruptcy cases are Chapter 7 cases, and about 37.5% are filed under Chapter 13. The remainder are Chapter 11 cases.
Percentages differ from state to state. In Alaska–the state with the smallest number of annual bankruptcy filings in the country–Chapter 7 cases make up more than 79% of filings. In the U.S. Bankruptcy Court for the Northern District of California, 41.6% of consumer bankruptcy cases are filed under Chapter 13.
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General United States Bankruptcy Statistics
1. 62% of personal bankruptcies in the United States were due to medical expenses.
A study conducted by Harvard University has shown that, without doubt, the most significant of all US bankruptcy statistics is that nearly two-thirds of all bankruptcies were due to medical expenses. One of the most interesting figures to come out of this study was that 72% of the bankruptcy filings had come from people with some form of health insurance. While this was a shock, it also crushed the myth that medical bills only affect the uninsured.
Medical bankruptcy statistics show that people taken by a rare disease or some form of serious illness will be left with hundreds of thousands of dollars in medical bills. Medical bills of this size can easily wipe out any savings, equity accounts, and college funds and leave no other option but to go bankrupt. Eventually, a surge in the US bankruptcy rate is likely to happen.
Moreover, with advancements in technology, healthcare costs in the United States are at an all-time high. As new illnesses emerge and more people become patients, health insurance is becoming expensive and extremely confusing.
It is no secret that Americans face their greatest financial difficulties regarding medical care. Since 26% of Americans between the ages of 18 and 64 are struggling to pay their medical bills, its no wonder these bankruptcy filing statistics show that medical expenses cause more people to go bankrupt than anything else.
Annual Bankruptcy Filings Fall 297 Percent
Bankruptcy filings fell sharply for the 12-month period ending Dec. 31, 2020, despite a significant surge in unemployment related to the coronavirus .
Annual bankruptcy filings in calendar year 2020 totaled 544,463, compared with 774,940 cases in 2019, according to statistics released by the Administrative Office of the U.S. Courts. That is a decrease of 29.7 percent.
Only one category saw an increase in filings. Chapter 11 reorganizations rose 18.7 percent, from 7,020 in 2019 to 8,333 in 2020. Of those, 7,786 involved business reorganizations.
The number of total filings was the lowest since 1986, when 530,438 bankruptcies were filed. Filings fell sharply in the early months of the pandemic, starting in March 2020, when many courts offered limited access to the public. In addition, bankruptcy filings can lag behind other economic indicators. Following the Great Recession, which began in 2007, new filings escalated until they peaked in 2010.
The following tables are available:
- Business and non-business bankruptcy filings for the 12-month period ending Dec.31, 2020
- Bankruptcy data for the twelve-month periods ending in December 2019 and in December 2020
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Annual Statistics For 202021
We publish annual statistics on a financial year basis for personal insolvency, including bankruptcies, debt agreements and personal insolvency agreements.
- Total personal insolvencies fell by 49.6% in 202021 compared to 201920. By type of personal insolvency:
- bankruptcies fell by 46.7%
- debt agreements fell by 54.2%
- personal insolvency agreements fell by 46.7%.
An Alternative Approach To Understanding Bankruptcy Statistics
Most companies extend credit to their customers in one way or another. Perhaps you invoice on completion of a project or ship a product before receiving payment. If you extend credit to your customers, understanding local and regional business trends can help minimize potential losses. Analyzing business bankruptcy statistics can yield insights into which areas have a riskier environment for creditors. However, the standard approach for ranking states with bankruptcy data obscures the real trends.
We have an alternative approach to analyzing current business bankruptcy filings. We believe this approach will help credit professionals identify potential risks when making credit decisions.
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What If You Didn’t Receive A Discharge In The First Case
In most situations, you can file again and receive a discharge in the second bankruptcy if you didn’t receive one in the first matter. But that’s not always the case. Also, you lose the full benefits of the automatic staythe order that stops creditors from collectingwhen you file multiple bankruptcies in quick succession.
The court dismissed the first case
- Unless the court orders otherwise, you can file again. A 180-day waiting period may apply if you failed to obey a court order or appear in the case, or you voluntarily dismissed the case after a creditor filed a motion for relief from the bankruptcy stay.
The court denied your discharge
- You might be able to file again, but you probably won’t be entitled to a discharge of the debts listed in your first case. This is another unusual circumstance wherein you would be wise to seek the advice of an experienced bankruptcy lawyer.
What Happens To Your Credit Rating After Discharge
The official receiver wont tell the credit agencies when your bankruptcy ends. You may need to ask the credit agencies to update their records to include details of your discharge.
The bankruptcy can stay on your record for 6 years after the date of the bankruptcy order.
Read more on this in the Information Commissioners Office Credit explained document.
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Consumers Are Not Out Of The Woods
Statistics Canada has published this graph of Household Sector Leverage Indicators, 1990 to Q3 2015. During this time, the ratio of consumer debt to total household assets has fluctuated and risen slightly. Truly alarming, though, is the rise of the dark blue line of credit market debt to disposable income.
By the third quarter of 2015, Canadians collectively had $1.64 of debt for every $1.00 of yearly income.
High Income Or Surplus Income
When declaring bankruptcy, the trustee will compare your household income to the federal guideline established for a household of your size. If your income is higher than this federal guideline, you may be required to pay 50% of your surplus income towards your debts each month for close to two years. This alone will repay a portion, if not all of, your debts.
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What Is Chapter 13 Bankruptcy
Chapter 13 bankruptcy is a way to reorganize your debt. It involves repaying none, some or all of your debt over the course of three to five years. One important difference between Chapter 13 and Chapter 7 bankruptcy is that in Chapter 13, your debts arent discharged and youre still liable to pay them.
With Chapter 13, most or all of your creditors are lumped together into one large pool. You then make payments each month to a lawyer called a trustee whos assigned to your case. The trustee distributes your payment to the creditors.
In Chapter 13, you can reduce the amount owed on secured loans, reduce interest rates, re-amortize loans for a lower monthly payment, remove certain liens, extend the time to pay back taxes, reduce the amount owed on unsecured loans sometimes down to zero and legally break leases, says bankruptcy attorney Dai Rosenblum of Butler, Pa. Because a Chapter 13 filing can extend up to five years, Rosenblum says many people use it to catch up on their mortgage.
When you proceed with a Chapter 13 case, you must file a plan detailing how some, or all, of the debts will be repaid over time. In addition, you or your attorney, in conjunction with the trustee for your case, will determine a reasonable amount that you can afford to pay back to creditors. That amount is based on your assets, monthly income and monthly expenses.
Number Of Bankruptcy Filings
The number of bankruptcy filings in the United States has steadily increased over the last century, and especially so from 1980 to 2005.
Bankruptcy filings hit an all-time high in 2005, when more than 2 million cases were started. In that year, one out of every 55 households filed for bankruptcy.
The following year, bankruptcy filings dipped to about 600,000, the lowest point in 20 years.
The vast majority of bankruptcies are now filed by consumers and not by businesses. In 1980, businesses accounted for 13 percent of bankruptcies. Today, they account for about 3 percent.
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