Bankruptcy Timeline

krisskross

Someone close to me went down the bankruptcy road last year...in fact she will be discharged from bankruptcy on April 1st as the period of time has reduced to one year.
She was absolutely at her wits end, hounded constantly by debt collection agencies, scared to answer the phone etc, frightening us all because she obviously felt life was not worth living and could see no solution.
I lent her the cash to file the petition, she had assistance from a CAB debt counsellor to compete the forms. Her liability was set at nil by the Official Receiver as she was on benefits......the stress was rendering her unable to hold down a job.She had no assets to realise any cash on, lived in rented accommodation and did not own a car. Household items were discounted, TV computer etc. She found everyone at the court helpful and non-judgemental, it was not the ordeal she had anticipated.
She did not have her bank account closed, obviously the Official Receiver wanted to know what was in it but as long as she informed her bank of the bankruptcy she could keep the accountat their discretion
Two months later she found work, and informed the OR, but after he looked at her new financial statement it was decided that she wasn't actually any better off financially so still had no liability.
One thing she found was that she needed to send all her creditors a copy of the bankruptcy petition and to keep it available in case anyone came to the house. Many debt collection agencies are not particularly scrupulous.
A year on she is happier than she ever thought it would be possible to be again. Obviously having been a bankrupt will affect her future financial standing, but as she says : "if no one ever offers me credit again i will be happy"
She had to see the Official Receivers representative just once, and quite briefly, now her life is back on track, thank goodness, at one point we thought we might not have a happy ending.
Chris

dba12

Dave

The start of the Bankruptcy is the date the Court make the order.

Normally you would contact the Court and make an appointment with the Bankruptcy Clerk to visit the Court complete the forms and make payment IN CASH.

You will then go before the District Judge who will ask you a few questions to ascertain that you realize what Bankruptcy is and that you have considered any and all alternatives.

He will then grant the order this is the date of your bankruptcy and, assuming that you have not been declared bankrupt in the last 5 years, you will be automaticaly discharged 1 year later.


Any funds in your bank account or owed to you will go to the Official Reciever ON THE DAY YOU ARE MADE BANKRUPT. Any money that you earn the following day is yours. He will arrange for you to visit his office. If the debts are relatively small ones he may arrange for you to complete the booklet, return it to him and have a telephone interview. It is their choice, not yours.

In essence they want you to complete a form showing what you have coming in against what you have going out. If the income exceeds the outgoings then they want the difference. It is called and income Payments Order. Unfortunately, it does not work the other way around. Therefore it makes sense to ensure that the income does not exceed the outgoings.

I would suggest that Bankruptcy is the last consideration, not the first. Look at the options. The credit reference agencies record the bankrutcy against you for a 6-year period. The same for defaults and CCJ's so it does give you the chance to "clean slate" it.

Bankruptcy offers nothing for your creditors if you have nothing.

Best of luck any questions just post them here.

DBA12

Debt_Free_Chick

Any money that you earn the following day is yours

Just to be clear, you MAY have to pay something as you later say here

If the income exceeds the outgoings then they want the difference. It is called and income Payments Order.

See "WILL I HAVE TO PAY ANYTHING FROM MY WAGES?" here

http://www.nationaldebtline.co.uk/england_factsheets/factsheet_01.php3

Therefore it makes sense to ensure that the income does not exceed the outgoings.

Not sure how one would achieve this. You can't "inflate" your outgoings ... the OR will only accept reasonable expenditure. So 2 people can't claim £500 a month for food, for example. You'll need to cut it back to something more realistic.

Also .. bankruptcy effectively wipes out your debt. So it doesn't seem unreasonable to pay some back ... even if it's only an amount you can afford, for a limited period.

Regards

dba12

Debt_Free_Chick wrote:

Also .. bankruptcy effectively wipes out your debt. So it doesn't seem unreasonable to pay some back ... even if it's only an amount you can afford, for a limited period.

Regards

Totally agree.............after all in most cases it is only for a year.