Bankruptcy in the 21st Century
Nowadays, bankruptcy is not such a shameful word. In the 21st century where credit flows freely and temptation is waiting around every corner, it is so easy for even the most careful of spenders to find that they are spiralling out of control. But what happens when things become too much and your only option is to consider bankruptcy?
Be prepared for a fair amount of paperwork and a fee of around £482 to cover court costs at £150 (these fees are waived if you receive state benefits). The remaining £325 is used in administration charges and the final £7 counts towards an affidavit. The paperwork consists of a Debtors Petition which will have to be completed in triplicate and a Statement of Affairs which must be duplicated. You will then need to hand these documents over to your local court along with your fee. Upon receipt you will stand before a judge who will review your application and decide if you are eligible to declare yourself bankrupt.
If the judge has accepted your application, he will refer you to an official receiver who will go through your documentation to assess the circumstances which lead to your bankruptcy. He will free you from the burden of having to negotiate monthly fees with your creditors as he will act on your behalf to work out exactly how much you have available to pay them.
With bankruptcy, any properties or assets that you own will need to be sold along with any possessions which are deemed unnecessary, but you will be able to retain any equipment needed for work purposes or items such as clothing, basic furniture and cooking utensils. You may also be asked to sign an Income Payments Agreement which will bind you to make a fixed monthly fee from your wages each month for three years.
Whilst you are bankrupt you will not be able to use any credit cards or bank accounts. You will also be exempt from borrowing any more than £500. On top of this your credit rating will be damaged. Bankruptcy will last for one year, after this time the majority of the money that you owe will be dissolved. This will leave you free to start again as the burden of debt will be lifted and the pressure removed.
IVA and Bankruptcy News posted on 29/05/2007 16:08:16
|
