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What Would Bankruptcy Mean For Me?

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by: No more debt !
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Date: Sun, 30 Dec 2012 Time: 10:27 PM

What Would Bankruptcy Mean For Me?

 We hear in the news all the time about business and individuals failing because of debt. Shops shut their doors, offices close their doors never to open again and people face the trauma of having to declare themselves bankrupt.

When a business shuts down the shop or office is re-let, the staff find new jobs but what does bankruptcy mean for you when you can't deal with your debt any more?

 The process of declaring yourself bankrupt is a very big decision. It's more than just a case of wiping the slate clean of all your debts and starting again, going bankrupt means going through all your income and your spending, portioning out your assets fairly to your creditors and submitting yourself to rules such as not being able to work in certain positions or start your own business for a certain time. When you become bankrupt you are required to be open and honest with the official receiver and trustees who will administer your accounts, attending their offices for meetings with them, and your creditors when required.

 Declaring Yourself Bankrupt

 If you're declaring yourself bankrupt you can't just write to your creditors and tell them you don't have any money, you need to go to court accompanied by a completed Debtors Petition form and a Statement of Affairs. These forms can be downloaded or are available from a legal stationer. Petitioning for your own bankruptcy will cost you £700 plus a court fee of £175.  You will have to pay these fees in cash, with a postal order or a cheque from your bank, building society or solicitor. Unfortunately the court won't accept a personal cheque when you're making yourself bankrupt! The deposit required to start the bankruptcy process is £525. If both you and your spouse wish to file as bankrupt and haven't been in business together you will both need to complete separate forms and each pay your deposit individually.

 The paradox that petitioning for bankruptcy costs at least £875 hasn't been lost and there are charitable trusts that can help you out. Go to your local Citizens' Advice Bureau to find out who these are and how to get in touch with them.Once you have submitted the completed forms and paid the deposit there will be a court hearing. In court one of several things could happen, if more information is needed the case could be delayed while the court gathers more information, your petition could be dismissed.

 This is more likely to happen if an administration or debt relief order would be more appropriate for your circumstances. The court could appoint an insolvency practitioner if they find that an Individual Voluntary Arrangement (IVA) is more suitable or they can declare you bankrupt, in which case their decision takes immediate effect.

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To know more about IVA visit What is an IVA

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