Home » Bankruptcy Advice

An application for a bankruptcy order can be made by one or more of your creditors owned at least £750 and you can even apply for bankruptcy yourself. Although bankruptcy is one way of dealing with the debts you cannot pay, it is still a very humiliating and public experience. There are other alternatives and Bramley Carrington can advise you on the best course of action to take.

Bankruptcy will mean the closure of your business, the dismissal of your employees and you will have to relinquish any possessions of value and lose all rights to any property you own apart from any tools you need for business purposes and domestic equipment – clothes, bedding and furniture. You will not be able to carry on a business without advising the people whom you are doing business with the name in which you were made bankrupt. You will not be able to form or manage a limited company or act as company director without the courts permission. You may not hold public office and you will not be able to act as trustee for a charity of pension scheme. You will not be able to obtain credit of £500 or more, either alone or jointly, without disclosing your bankruptcy. After the bankruptcy order has been made, you may open a bank account but you must inform the bank or building society of your bankruptcy and they will impose restrictions. If there is any money in the account and it is more than you need for your day to day living expenses you must tell your Trustee. He can claim the surplus amounts to pay to your creditors.

Bramley Carrington know that an IVA could be a far better answer to your problems.

Bankruptcy Annulments and Reversal

Bankruptcy annulments and reversals can only be made by the Court.

Bankruptcy now usually last for a maximum of 12 months and after this period you will be discharged. There are, however, exceptions to this timescale.

If you have been an undischarged bankrupt during the 15 years before the current bankruptcy (unless the previous bankruptcy has been annulled) you will be discharged automatically on 1st April 2009.

If it is found the bankruptcy order should not have been made, you will be freed from bankruptcy immediately.

The Court will annul your bankruptcy if all your debts and the fees and expenses of the proceedings have been paid in full.

The Official Receiver may apply to the court for your discharge to be postponed if you have not carried out your duties under the bankruptcy proceedings.

At Bramley Carrington we do our best to lead you out of your financial burdens. We can advise you on IVA’s (Individual Voluntary Arrangement) and CVA’s, (Company Voluntary Arrangement) which will enable you to avoid the restrictions which apply to a bankrupt. You will have more say in how your assets are dealt with and how the payments are made to your creditors. The overall costs are likely to be less as you will not have to pay the fees and expenses which are charged in a bankruptcy.

An IVA begins with a proposal to your creditors to pay part or all of your debts. You will need to apply to the Court and you must be helped by an insolvency practitioner. Any agreement reached will be binding on them.

Bramley Carrington are able to call on the best insolvency practitioners to act on your behalf. When your insolvency practitioner is engaged you need to apply to the court for an interim order. This order will prevent your creditors proceeding with a bankruptcy petition against you while the interim order is in force. It will also prevent them taking any other action during the same period without the permission of the court. The court will be told the details of your proposal and whether they consider that a creditors meeting should be called. If a meeting is to be held, all your creditors need to be advised of the date and details of the proposal. The creditors will vote on whether to accept your proposals and if enough creditors vote in favour, the proposals are accepted (75% in value of the creditors present in person or by proxy and voting on the resolution).

The Court cannot however make an interim order if you have applied for one in the previous 12 months.

A CVA enables the management of the company to remain in control. An agreement is made between the company and its creditors to either delay payment or reduce the monthly payments made.

Insolvency terms and their meanings

Annulment

Cancellation

Assets

Anything of any value that may be used to pay your debts

Bankruptcy order

A court order making you bankrupt

Bankruptcy petition

A request made to the court for you to be made bankrupt. This may be made either by you (debtor) or by a creditor. It will also give the reasons why a request has been made.

Charging order

This is an order made by the court which gives the trustee, a legal charge on your interest in your home. This continues even after you are discharged from bankruptcy

Creditor

Someone you owe money to

Debts

Money you owe

Discharge

Freed from bankruptcy

Estate

Your property and/or assets which your trustee can use to pay your creditors

Income payments order

The court may order you to pay part of your salary or other income to the trustee if your income is more than you and your family need to live on

Insolvency practitioner

A person, usually a solicitors or an accountant, who specialises in insolvency. They will be authorised by the Secretary of State or by one of a number of recognised professional bodies.

Interest

A right to, or a share in, a property

Legal charge

Security (mortgage) to ensure payment of a debt

Preferential Creditor

A creditor in bankruptcy proceedings who is entitled to receive certain payments in priority to other unsecured creditors. These creditors include occupational pension schemes and employees.

Proxy

A person can appoint someone to attend meetings and vote in their place – a proxy

Trustee

The trustee is either the Official Receiver or an insolvency practitioner and they will take control of your assets. The trustee’s main duty is to sell these assets and share the money amongst your creditors.

Unsecured Creditor

A creditor who does not hold security (mortgage) for the money owed. Some unsecured creditors may be preferential creditors.