There are two ways an individual can become bankrupt:
Voluntary Petition. 1.
You can petition the court for a bankruptcy order if you find yourself in a position where you cannot pay your debts.
Petition of Creditors.
Alternately, if you owe someone £750 or more, they may petition the court for a bankruptcy order to be issued against you by filing a Creditor's Petition.
Each case requires a petition to the bankruptcy court. Here, you will be required to attend an interview and pay the required fees (typically at least £450). A Debtor's Bankruptcy Petition (which details the reasons for your bankruptcy) and a Statement of Affairs (which lists your assets) must also be submitted.
What Happens Next After the Bankruptcy Order Is Issued?
As soon as a court issues a bankruptcy order, you are immediately subject to certain restrictions. These consist of:
* Borrowing in excess of £500 while declaring bankruptcy;
* Serving as a director of a corporation;
* Creating, administering, or promoting a business with court approval;
* Performing insolvency practitioner duties;
* Running a business while concealing the fact that it is insolvent from its clients.
In addition to abiding by these restrictions, you must work with your Trustee. This person will be appointed by the court and will either be an Official Receiver or an Insolvency Practitioner (if you have significant assets). They will have complete control over your assets and use them to repay your creditors. You may not interact directly with your creditors; instead, all requests for payment of debts must be made directly to your Trustee.
Typically, this arrangement lasts for about a year, after which the majority of individuals are 'discharged' from debt. This may be delayed, however, if there is a lack of cooperation with a Trustee or if any of the restrictions are violated. In addition, some individuals are subject to a Bankruptcy Restriction Order, which can implement the bankruptcy restrictions (described above) for up to 15 years. These are typically filed against those whose financial difficulties were caused by carelessness or dishonesty.
Consult a Professional for Advice. If you are experiencing financial difficulties, you must be aware of your options. A legal professional will be able to provide you with all the information you require prior to taking action, including an explanation of the bankruptcy process, a review of its repercussions, and an examination of potential alternatives.""
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