Bankruptcy? How long before your 'debts' are cleared/vanished? I heard that Bankrup

Karen_taris

I heard that the Bankruptcy procedure can be done within 9 months - 12 months.

The debt consists of credit card, loans.
(No mortgage or assets)

But form the day it starts, that you declare it then how many days/weeks/months can they take to remove/clear your debt?

in a range of months, how long can this take?

fiveyearplan

The debts are no longer your responsibility from the date of bankruptcy and creditors can no longer chase you for payment.

Karen_taris

fiveyearplan wrote: »

The debts are no longer your responsibility from the date of bankruptcy and creditors can no longer chase you for payment.

When you declare it, how long does it take for the 'date' of the bankruptcyy to start ?

as the procedure/ forms etc can take time.


and who tells the creditors to stop collecting money, and wipe the debt clean ? the courts? or some other middlemen ?

jayk

Hi

You may find it helpful to ready the sticky on this BR page lots of BR info, facts re the process and proceedure. Then if you have further questions come back and ask further questions.

alastairq

Karen_taris wrote: »

When you declare it, how long does it take for the 'date' of the bankruptcyy to start ?

as the procedure/ forms etc can take time.


and who tells the creditors to stop collecting money, and wipe the debt clean ? the courts? or some other middlemen ?

Hi..as Jayk says, all the correct info is in the stickies...

Bankruptcy is a Court process.

It is effective the instant the Judge stamps the petition.

Once done, only a Court can undo it.

From that instant all the financial affairs of the bankrupt are controlled and dealt with by the Official Receiver [an officer of the Court].

It is the OR's task to realise all the bankrupts assets for the benefit of creditors.

From the date & time of the petition being granted, no creditor is allowed to pursue the debtor [partly because, the debtor no longer has control over their finances and assets].

However, the OR also has to consider the interests of the bankrupt...and to that end, allows the bankrupt sufficient income for a 'reasonable' standard of living.

Since realising assets can be costly, for little or no gain for creditors, generally any domestic goods, or small value assets are exempted.

Whilst Undischarged, the bankrupt has certain restrictions placed upon them.

As well as duties and responsibilities to the OR.

In normal circumstances, the OR's investigations are completed within 12 months...so from that period, the Bankrupt achieves Automatic Discharge.

This means the bankrupt is free from the restrictions of the Bankruptcy Order.

However, if the OR has identified a surplus of income, then, by agreement with the bankrupt, that surplus income is paid into the BR estate, monthly, for a period of 3 years..from the date of agreement. This is a surplus-based IPA.

If, on the other hand, the OR and the bankrupt cannot reach agreement over a surplus, or how much..then the OR applies to the Court for a decision. This, the Court orders [or not] surplus payments..this is an IPO.

Bankruptcy remains on the credit files for 6 years form date of petition.

It is also publicly recorded for ever, in the London Gazette.

Oh, and bankruptcy cannot be presumed, until the actual petition is granted....in other words, an individual can change their mind right up until the very last moment. Until that moment, the individual is not bankrupt, and should not be considered as such.

Karen_taris

alastairq wrote: »

Hi..as Jayk says, all the correct info is in the stickies...

Bankruptcy is a Court process.

It is effective the instant the Judge stamps the petition.

Once done, only a Court can undo it.

From that instant all the financial affairs of the bankrupt are controlled and dealt with by the Official Receiver [an officer of the Court].

It is the OR's task to realise all the bankrupts assets for the benefit of creditors.

From the date & time of the petition being granted, no creditor is allowed to pursue the debtor [partly because, the debtor no longer has control over their finances and assets].

However, the OR also has to consider the interests of the bankrupt...and to that end, allows the bankrupt sufficient income for a 'reasonable' standard of living.

Since realising assets can be costly, for little or no gain for creditors, generally any domestic goods, or small value assets are exempted.

Whilst Undischarged, the bankrupt has certain restrictions placed upon them.

As well as duties and responsibilities to the OR.

In normal circumstances, the OR's investigations are completed within 12 months...so from that period, the Bankrupt achieves Automatic Discharge.

This means the bankrupt is free from the restrictions of the Bankruptcy Order.

However, if the OR has identified a surplus of income, then, by agreement with the bankrupt, that surplus income is paid into the BR estate, monthly, for a period of 3 years..from the date of agreement. This is a surplus-based IPA.

If, on the other hand, the OR and the bankrupt cannot reach agreement over a surplus, or how much..then the OR applies to the Court for a decision. This, the Court orders [or not] surplus payments..this is an IPO.

Bankruptcy remains on the credit files for 6 years form date of petition.

It is also publicly recorded for ever, in the London Gazette.

Oh, and bankruptcy cannot be presumed, until the actual petition is granted....in other words, an individual can change their mind right up until the very last moment. Until that moment, the individual is not bankrupt, and should not be considered as such.

thanks alot.

so the main thing i was asking was, if you have debt of £12,000 of cc's and loans,
then it can take 12 months....for this debt to Clear/wipe away.
- so that you DO NOT have to pay it, via DDs, minimum payments etc.

or it can also be 3 months from the day you file for bankruptcy?


if you mean it takes12 months for the debt to be wiped away, what happens in the 12 month period, as far as paying your debts is concerned?
(Currently the minimum payment is being paid) - so would you have to continue paying these minimum payments within these 12 months ?

and the London Gazette? can this be stopped that you aren't advertised there ?


and if you have joint accounts, with the joint account holder being at a diff address, can they stop their account/freeze it too? and even 'write;' to them at their address ?

fermi

From the date of the bankruptcy order being made, you must not pay the debts at all.

It does have to be gazetted. Sorry.

The bank may well close/freeze any joint accounts. It's up to them.

dojoman

Have you contacted any of the debt charities? you may find it easier talking to someone:)

alastairq

Karen_taris wrote: »

thanks alot.

so the main thing i was asking was, if you have debt of £12,000 of cc's and loans,
then it can take 12 months....for this debt to Clear/wipe away.
- so that you DO NOT have to pay it, via DDs, minimum payments etc.

or it can also be 3 months from the day you file for bankruptcy?


if you mean it takes12 months for the debt to be wiped away, what happens in the 12 month period, as far as paying your debts is concerned?
(Currently the minimum payment is being paid) - so would you have to continue paying these minimum payments within these 12 months ?

and the London Gazette? can this be stopped that you aren't advertised there ?


and if you have joint accounts, with the joint account holder being at a diff address, can they stop their account/freeze it too? and even 'write;' to them at their address ?

AS Fermi says, once BR is petitioned, you have no more to do with any unsecured debts whatsoever.


Immediately on petition, you must cease all debt payments completely.

To ignore this means you will be breaking the Law.

[Your entire wealth and assets become controlled by the OR...who realises everything for the benefit of creditors.]

The only payment you might have to make, concerns an IPA, as I explained, if a surplus of your income is identified.....this goes to the BR estate, to be dealt with by the Receiver.

Where do you get the ''3-month' idea from?

This used to apply to ''Early Discharge'', whereby the Receiver could apply to Court to have a BR released from their duties early, if all investigations finish early. This is nowadays extremely rare, as it costs money.

Regarding joint accounts?


If any debt has occurred, then the creditor can pursue the other party for the full amount....if one party petitions BR.

The Bankruptcy protects the bankrupt from any further actions by creditors.

So, yes, the other party to a Joint account which is in debt [or, owed]....will find out big-style from the creditor!


The stickies explain everything regarding BR.



IN essence, all your current questions can be answered by understanding exactly what bankruptcy is?



Again, in simple terms, the Bankruptcy petition means, all of a person's financial and property affairs, control of assets, etc, pass entirely over to the Official Receiver.

Aside from normal, reasonable living expenses, [which the Receiver allows].....the BAnkrupt only has financial contact with the Official Receiver.

So basically, one hands over control of one's entire life to the OR.

PippaGirl_2

Karen, as said above the debt is not your responsibility from the date the court declares you BR, so the creditor cannot chase you for it.

As for when it is 'cleared', the default dates on your credit file should be changed to the date of your BR once you have been discharged from bankruptcy which is usually after one year from the BR date. The credit file should then say that the debt is settled/satisfied (cleaning up your credit files explains how to get this done) by each entry. All that will then show on your credit file for six years afterwards, so the effects of the bankruptcy will last that long. Even then on some financial products and in some situations you will always need to legally declare that you have previously been bankrupt.

So to clarify, the debt is not your responsibility from the date of your BR, but the effects/debt will show on your credit files and will affect you for 6 years.

I would advise going to the CAB to discuss your debt with someone face to face to be given advice as to what is best for you in your situation.

inneedofsomehelp

Karen with debts if £12,000 it may be worth your while researching a debt relief order. I had never heard of these proir to tackling me debts. A debt releif order has specific criteria
debt has to be less than 15k
you cannot own a home
You must have a surplus income after all reasonable expenses of LESS than £50 per month
you cannot own assets over £300 - apart from a car where you can have a car to value of £1000.
the cost is only £90 for a debt relief order rather than the £700 needed for bankrupsy.

Although the 2 processes still give the same end result the debt relief order is a lot less invasive in terms of the OR etc.

There is a sub board on here.

Have you tried to complete this ? It is from a debt charity and can really help give suggestions as to what is best for you regarding tackling debts. They can also help you with forms, info needed etc

http://www.stepchange.org/Debtremedy.aspx

Whilst this board is very very helpful and supportive you MUST as part of the bankrupsy or other debt remedy seek specialist advice. In bankrupsy for example you need to confirm you have sought professional advice regarding your situation

Good luck