Many people don’t understand bankruptcy and how complex and challenging it can be. In layman’s terms, this article looks at the process, who is involved and the implications for the person declared bankrupt and how to find a good solicitor to guide you in the process.
The process of being declared bankrupt is both a legal process and for most people who are declared bankrupt, a very difficult process, even a little traumatic at times. So for those reasons it is important to find a solicitor to make sure that the legal aspects of the case are dealt with fairly and that you have representation. This is more than a mere technicality – declaring bankruptcy is very serious.
The decision as to whether you are bankrupt is made by a court. You petition a court to be declared bankrupt – or your creditors can do it. As creditors can file for your bankruptcy in effect, you can actually be declared bankrupt without your consent. That’s quite frightening!
After you have been declared bankrupt, the court will appoint an Official Receiver. The Receiver will interview you and ascertain how much money you have, any assets that you have and anything that can be sold to bring in money. If you possess assets, you’ll find a Trustee is appointed (an Insolvency Practitioner) to sell these.
Going forward, the Receiver/Trustee will control all your finances and assets, not you.
If you seem to have any surplus income, the Trustee can apply to the court for an official Income Payments Order. This order will remain in place for a 3 year period, although you might be discharged legally after one year.
Bankruptcy is public news. The bankruptcy details will be published in local papers and sometimes National newspapers. Any ‘Financial Associates’ you have (eg utilities etc) will be told of the bankruptcy, and this will impact future financial decisions you can make, eg mortgages etc.
Finding a solicitor will mean that your voice is heard and that the process is fair to you. It can help to feel you have some control of this difficult and trying time.