Bankruptcy

Bankruptcy is an option that often has to be considered when an individual cannot pay their debts as they fall due. For a first time bankruptcy within a 15 year period, for debts under £20,000, the procedure is known as a Summary Administration and you may be discharged after two years.

A first time bankrupt with debts over £ 20,000 may be discharged after three years. Although bankruptcy has a bad stigma and is publicly advertised, it should always be considered when dealing with individual insolvency cases.

Please note that if you are ever faced with the prospect of bankruptcy you should look at alternatives as soon as possible such as the Individual Voluntary Arrangement procedure (IVA).

What are the implications of bankruptcy?

• You lose control of your assets.
• You cannot obtain credit for over £250 without the permission from the lender.
• You cannot act as a company director.
• You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
• You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
• You may not practice as a Charted Accountant / Lawyer
• You may not act as a Justice of the peace (JP)
• You may not become a member of parliament
• You may not become a member of the local authority.
• Your credit is affected for many years after the annulment.