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What Happens After I File For Bankruptcy
After you complete the process of filing for personal bankruptcy, there is an immediate stay of proceedings in any legal cases against you regarding your debt. This part of the process protects you from unsecured creditors who might wish to begin or continue any legal actions against you, such as wage garnishees and lawsuits. Creditors are also barred from contacting you after you have filed.
Within five days of filing your bankruptcy documents with the Office of the Superintendent of Bankruptcy, your Trustee will send a copy of the bankruptcy paperwork to all creditors so they can begin the process of filing their claims.
Your Trustee will also file any outstanding tax returns up until the date of bankruptcy. Any outstanding balances or penalties will be included.
After your personal bankruptcy paperwork is complete, you will have obligations such as providing monthly income statements and attending credit counseling sessions.
When your bankruptcy is discharged, the debts included in the bankruptcy will be cancelled. A notation about your bankruptcy will remain on your credit report for approximately six years after the date of discharge. As soon as your bankruptcy is discharged you can begin rebuilding your credit.
Are You Allowed To Go Bankrupt In The Uk If You Now Live Abroad
If you live abroad but are struggling to pay debt in the UK you may still have the option to declare yourself bankrupt here. However it will depend on where you live now and how long you have been there.
Where you have moved to a non EU country you have up to 3 years to go bankrupt in England & Wales from the date you left. As such you will generally have plenty of time to make up your mind.
However if you have moved within the EU then your right to go bankrupt in the UK was lost on the day you moved. Now the only way for you to do so will be to move back to the UK and live here for at least 6 months before applying.
In April 2016 the qualification rules for bankruptcy in England & Wales were updated. As a result if you move to another EU country other than Denmark you can no longer go bankrupt here.
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Important Things To Remember
Any money you have in bank and building society accounts that you need to live on should be withdrawn from your accounts BEFORE you take your bankruptcy petition to court. This is because your accounts will be frozen once your bankruptcy petition has been taken to court. When calculating the value of your assets, you must adhere to the following guidelines:
- You must ensure you do not falsely rise the value of any vehicles you own
- When calculating the value of furniture and other belongings, you must set their value at what they would sell at auction not how much they were worth when new or the cost to replace them
- Remember all such assets that you list here are open to be sold to help repay your debts
Immediately After Bankruptcy Has Been Approved
The bankruptcy order will then be set up and your bank accounts may be frozen because the Official Receiver takes control of it, while reviewing your finances.
Its a good idea to withdraw enough money, so that you can pay for anything you need while this process is being carried out such as groceries, fuel and household bills.
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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 Office of the Examinerof 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
What Happens If I Dont Tell The Trustee
As mentioned above, your trustee offers essential bankruptcy help to repay your creditors and begin to clear your name. However, if you fail to disclose all information and deliberately mislead the trustee, you are committing a criminal offence. Therefore, you could be fined or, in the worst possible case, sent to prison. It is vital you share all information regarding your finances with the trustee for the best possible bankruptcy help.
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Can I Apply For Joint Bankruptcy
You can apply for joint bankruptcy only if you have a business partner with whom you have taken out debts. You can file a joint application for bankruptcy with your business partner in such a case.
However, joint bankruptcy is not an option for couples. Even if you and your spouse took out a debt that is jointly owned, you will need to apply for bankruptcy individually.
In case of joint debts where both you and your partner are named on the credit agreement, and one of you goes bankrupt, the other person is fully responsible for paying the total debt on their own.
How Much Does It Cost to Go Bankrupt?In the UK, bankruptcy fees vary nominally depending on where you reside.In England, Wales and Northern Ireland, you need to pay a total of £680, which includes adjudicator fees worth £130 and official receiver fees amounting to £550.
If you live in Northern Ireland, this breakdown differs slightly. You need to pay a total of £683 out of which £151 is the court fee, £525 is the bankruptcy deposit and £7 is the solicitors fee.
Regardless of where you live, you will need to pay bankruptcy fees before you submit your application. If you cannot afford to pay the fees in a lump sum, you may be able to pay them in instalments. Contact the insolvency enquiry line for more information about this.
You could write Off Your Unaffordable Debt
Have You Moved From England Or Wales To Live Abroad But Still Have Uk Debts Or Property That Are Causing You Problems
If the answer to this is yes, and you are now struggling with payments, you may wish to consider whether filing bankruptcy from abroad is a good solution for you.
Dont bury your head in the sand as we are seeing more and more UK debts being transferred abroad to local debt collectors. The problem wont go away if you do nothing it will only get worse, so take positive action now. Do you really want your new life overseas spoilt by local debt collectors knocking on your door?
As a company we feel that we have unrivaled experience and background in dealing with this specialist type of personal bankruptcy. Since 2009 we have represented almost 700 individual clients living all over the world. Their bankruptcies were handled using Power of Attorney in the High Court of London, also known as the Royal Courts of Justice. We have helped our clients to deal with their creditors, their assets and explained and clarified how this process works, both in relation to the UK and also in relation to the Country that they now live in.
We are fully authorised by the Financial Conduct Authority to provide advice and assistance to consumers and any Company in the UK that offers this type of service should show that they are approved and licensed to do so. If they do not have FCA approval they should not be trading, let alone advising clients in relation to Insolvency & Bankruptcy.
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What Happens After I Have Been Discharged From Bankruptcy
Once you are discharged, all your debts will be written off. The bankruptcy order will be removed from the Individual Insolvency Register, this is usually within 3 months of the date of discharge. Your file will only show 6 years worth of information so the notice of the bankruptcy taking place will be stopped after 6 years of discharge. You can also apply for a certificate of discharge, which costs approximately £60, from the Official Receiver . They are not automatically issued unless requested.
The following are things that can happen after being discharged from bankruptcy:
- The OR can NOT get an Income Payment Order after discharge
- An OR can repossess the property if started this during bankruptcy
- You can keep any inheritance/money if received after the bankruptcy discharge.
If you have been discharged from bankruptcy, are not subject to any restrictions, undertakings, Income Payment Order or Arrangements, then you no longer have any duty to report changes to your circumstances to the OR.
You should now look to improve your credit score, get a normal bank account and live life to the full . If you have any doubts about any matters outstanding from your bankruptcy then you should ask the OR. Alternatively, you can contact the Insolvency Service Enquiry line.
Balance Transfer Credit Card
If you have credit card debt on a card with a high APR, try transferring the balance to a card that offers 0% interest APR. This lets you pay down the balance without being charged any interest.
Most of these special APR offers last between 12 and 20 months, depending on the cards terms. When the special offer is over, a regular interest rate will kick in, so its best to make as many payments as you can during the introductory period.
Using a balance transfer credit card to address debt can both help and hurt your overall credit score. It can help your score by reducing your overall credit utilization rate, which is the amount of your available credit in use. This is important because your credit utilization rate accounts for 30 percent of your credit score.
If you add more available credit without increasing the total amount of debt you owe, that lowers your credit utilization rate, which increases your credit score, says Sullivan. So, if you do a balance transfer and keep the old cards open but do not use them, your credit score will start to improve.
However, opening a new credit card can also negatively impact your score. When you apply for a credit card, there will be a hard inquiry on your credit report, which can reduce your score. Hard inquiries may stay on your report for as long as two years, though their impact on your credit score will likely decrease before then.
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Months From The Date The Bankruptcy Was Created You Will Be Discharged
If you work with with your official receiver and do not break any of the restrictions placed upon you to read more about these you will be discharged from your bankruptcy, 12 months after it was put in place. This means your debts will be wiped and your assets used to pay off a large portion of them.
How Often Can You File For Bankruptcy
There is no limit to the number of times you can file for bankruptcy, and no legislated time limit between bankruptcies. However, the length of the bankruptcy and your obligations within the bankruptcy along with the length of time your credit rating will be negatively impacted will increase with each successive bankruptcy. If you file bankruptcy more than twice, the Court will be required to determine how you will be discharged from bankruptcy.Find a local Trustee you can trust. Bankruptcy Canada can connect you with Trustees from coast to coast in Canada including Toronto and Ottawa. Talk to one today.
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Who Deals With Your Bankruptcy
An Official Receiver is appointed to protect your assets. They act as trustee of your bankruptcy affairs if you have no assets.
If you have assets, an Insolvency Practitioner will be appointed to act as trustee and sell your assets to pay your creditors. To read more, go to:
Once a bankruptcy order has been made against you, your creditors cannot pursue you for payment. The trustee is responsible for payments.
An Iva Has Less Effect On Your Job Than Bankruptcy
Although both might have some effect on your employment. Bankruptcy typically has more serious consequences. For example, solicitors and estate agents typically bar those affected from membership.
Between 2018 and 2019,
almost 17,000 people declared Bankruptcy*. In comparison with other forms of insolvency, more than 27,000 went for debt relief orders while almost 78,000 chose IVAs.
*According to The Gazette, ‘UK individual insolvency statistics for 2019‘, January 2020.
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Surplus Income Adds To The Cost Of Bankruptcy
As mentioned above, you may be required to pay a portion of your monthly income towards your debts via the Trustee, depending on how much you earn and the size of your household. The principle is that if you earn more than your household needs to survive, you must pay a portion of the surplus income to your Trustee for the creditors. The formula used to calculate this is prescribed by law. In simple terms, you will pay about half the amount deemed to be surplus income to your Trustee. Your Trustee can tell you how the surplus income rule will likely apply in your situation.
In general, the greater your income, the greater the cost of bankruptcy and the more attractive the alternatives to bankruptcy become.
The Individual Insolvency Register On Annulment
Once notice of the annulment is received your bankruptcy will be removed from the Individual Insolvency Register after:
- 28 days if the bankruptcy order should not have been made
- 3 months if the debts were paid in full or an IVA has been agreed
If an IVA has been agreed, details of this will appear on the register.
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Impact Of Brexit On Bankruptcy
Until the Government formalises an exit agreement with the European Union , there remain uncertainties of the impact of Brexit on bankruptcy. Any debts you owe in the EU might not be covered by bankruptcy as it stands now. If you live or work in the EU, any creditors could still potentially take you to court in the EU
If for example you live in the UK but own a home in the EU with a mortgage attached to it from an EU lender, they could still technically take you to court in the EU. It is important to get legal advice if you have creditors in the EU
Bankruptcy is an alternative insolvency solution to a Debt Relief Order and a Individual Voluntary Arrangement .
A Creditor Making You Bankrupt
Your creditors can present a creditor’s petition if you owe them an unsecured debt of over £5,000. This may be the sum of two or more debts which total over £5,000. There might be different petitioning creditors on the same petition for different debts you owe.
Once bankruptcy proceedings have started, you must co-operate fully even if it’s a creditor’s petition and you dispute their claim. If possible you should try to reach a settlement before the petition’s due to be heard – doing it later can be difficult and expensive.
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Can You Declare Bankruptcy In England Or Wales If You Live Abroad
An individual can make an application for a Bankruptcy Order to be made against themselves only on the ground that he is unable to pay his debts as they fall due. Applications can only be made online and the process is dealt with by an adjudicator, who is an officer of the Insolvency Service.
The insolvency process is governed by the Insolvency Regulations , comprisingThe Insolvency Regulations 2000 and the Recast Insolvency Regulation. Central to the IR is the concept that an individual should begin insolvency proceedings in the jurisdiction of their Centre of Main Interests , which is defined as the jurisdiction within which they are most closely connected. This means it will either be:
- the country where they mainly carry out the trade profession
- the country in which they habitually reside
The adjudicator in England and Wales cannot deal with bankruptcy applications by any person living in any EU member state , Scotland or Northern Ireland, unless the debtor can show that their COMI is in England and Wales and has been for 6 months prior to the bankruptcy application. If this does not apply, then debtors living in these countries must apply for bankruptcy in their own country.
Domicile is defined as the country in which a person is considered by law to have his permanent home. Note that a person cannot have more than 1 domicile.
