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To apply for your own bankruptcy you submit an application electronically to an adjudicator who makes a decision about your application. The adjudicator isn’t a judge, they are a government official who works for the Insolvency Service, and their role is to review and make decisions about individuals’ bankruptcy applications.
Once an application has been submitted, it will be reviewed by the adjudicator within 28 days. The adjudicator may contact the applicant directly during this time if there are questions about information contained in the application or about the individual’s identity. If they do need to contact the applicant, the adjudicator will then have an additional 14 days to make a decision about that application.
Using the information provided in the bankruptcy application, the adjudicator can choose to either accept or refuse an application. Once a decision has been made, the applicant will receive either an email or a letter informing them that a decision has been reached and asking them to sign into their application to find out more.
If the individual’s application is refused for any reason, the adjudicator will upload a document which will contain an explanation about why the application was refused and information about what the individual can do next.
There are two fees you have to pay:
If you are a married couple and you are both applying for bankruptcy, you will each have to pay separate fees. If you were in business as a partnership, each partner will have to pay separate fees, unless all the parties apply for a joint bankruptcy petition under the Insolvent Partnerships Order 1994 (Form 16).
Applicants can pay the bankruptcy fee either online by debit or prepaid cards or by cash at any Royal Bank of Scotland branch. Paying by instalments is available for all those paying the fee online. The minimum online payment amount is £5 and can be paid in as many instalments as needed.
The Official Receiver is a civil servant and an officer of the Court. He is responsible for administering bankruptcies and will act as a Trustee of your estate unless a private sector Insolvency Practitioner is appointed.
If you have successfully applied for your own bankruptcy someone from the ORs office will contact you within 2 weeks regarding next steps.
One of the Official Receiver’s main duties is to investigate your financial affairs for the time before and during your bankruptcy.
An Insolvency Practitioner can be appointed Trustee instead of the Official Receiver, they must be licensed and are usually accountants or solicitors. The Insolvency Practitioner is then responsible for the disposing of your assets and making payments to your creditors.
When a bankruptcy order has been made, you must provide the Official Receiver with information relating to your financial affairs such as: a list of your assets (property, pensions, insurance policies etc), amounts of each debt and to which creditor they are owed to, within 21 days.
Any assets are then to be handed over to the Official Receiver along with any bank statements and insurance policies relating to your property and financial affairs.
Any assets and income increases obtained during the bankruptcy should be declared to the Official Receiver.
You must not obtain credit of £500 or more from any person without first disclosing the fact that you are bankrupt.
Any bank or building society accounts must no longer be used. You must not make any direct payments to your creditors. You may also have to attend Court to explain why you are in debt. If you do not co-operate, you could be arrested.
Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home. Where the home is co-owned, the debtor’s interest can still be realised, but a right of occupation period of twelve months is allowed for the disposal of the property if a co-owner, family or dependents of the debtor occupy it. At the end of the twelve-month period, the property will almost certainly have to be put up for sale, enforced by a Court order if necessary.
The other main disadvantages of bankruptcy are the constraints forced upon the bankrupt and having to declare oneself as a bankrupt for certain transactions.
A bankrupt may not:
When a bankrupt is discharged these constraints are ended.
A bankrupt may open a new bank or building society account but should disclose the fact that they are bankrupt. The bank or building society may then impose conditions and limitations. Overdraft facilities or chequebooks must not be obtained, as they are likely to be dishonoured. The bankrupt must inform the Trustee of any funds available in the account, which exceed the normal living expenses, in order for the Trustee to distribute among the creditors.
Your bankruptcy will be registered with credit reference agencies and remain on your file for a minimum of six years. After this time you may still have to declare your previous history, particularly when applying for a mortgage.
A bankrupt may be discharged (freed from obligations under the bankruptcy order) after the one year.
Discharge is not necessarily automatic and can be postponed by the Court. In addition, the discharge may not necessarily free that person from certain all liabilities and does not mean that unrealised assets will be safeguarded.
Discharge releases the bankrupt from most of the debts owed at the date of the bankruptcy order. Exceptions include debts arising from fraud, certain crimes and fines. Certain other debts such as damages or personal injury or money owed under family proceedings (such as maintenance) will be released only if the Court agrees.
If you have been declared bankrupt before, within the last 15 years, you will not be automatically discharged. You will only be able to apply to the Court for a discharge 5 years after the date of your current bankruptcy order; even then the Court may refuse or delay discharge.
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