Ideal for:
- Residents of England, Wales or Northern Ireland
- Where there are no other options available to your client
- Where your client has failed to meet an IVA
How it works:
Usually, any assets that your client owns (e.g. house, car, valuable items) will have to be sold and the proceeds, along with any savings and investments, shared amongst creditors. In addition, if your client has a monthly disposable income after taking into account essential living costs then they could also be asked to pay a monthly income payments order. Any outstanding debt thereafter will be written off when your client is discharged from bankruptcy (usually 1 year).
Benefits:
- Creditors will no longer be able to pursue your clients or demand further payments
- Any personal or occupational pensions your client has should remain unaffected
The Facts:
- Usually, any valuable assets (e.g. house, car, valuable items) will have to be sold, and any savings and investments seized
- An income payment order may be made in response of any surplus income. This will normally last for 3 years
- Your client's credit rating will be affected for several years
- Bankruptcy will prevent your client from holding certain positions, such as a company director or within local government
- Some hire purchase agreements contain a clause to terminate the agreements in the event of bankruptcy
- Fees are payable. Your client will have to pay £450 towards the costs of administering the bankruptcy and in most cases, your client will pay the court fee of £150. There is also a £12 fee to swear the statement of affairs if this is done in the High Court or before a solicitor
Need more information? Read our Questions & Answers on Bankruptcy.
