What happens on the creditor's side?

elljay

Presumably my creditors receive a letter saying Elljay's filed for bankruptcy, but then what happens. Do they find out how much else I owe and who to? Do they have to stake a claim so that if I get a payment order they will receive so much of it?

What happens from their side? And how much can they expect to get from a payment order? And are all creditors treated equally?

Can't seem to find out much about this. Thanks

LJ

longtermplanner

EDIT - read debtinfo's post below as it is more accurate than what I wrote here!!!!

I don't think they will find out who your other creditors are.

They will only get any money once the Insolvency Services costs are paid. Unless you have a house with a lot of equity that is unlikely to happen. Bankruptcy costs are routinely 5-10k and if you have had a house can escalate to 30k+

All creditors are treated equally. HMRC used to get preferenece, I beleive, but not any more.

debtinfo

The creditors get a report from the official receiver. They do get a list of your creditors and how much you owe to each. They also get a summary of your financial position. They get a list of your assets and for each of the assets the OR gives a summary of if it will be realised and how or if it will be exempted. They also get a summary of the causes of your bankruptcy and the events leading up to it.

The bankruptcy costs are routinely more like £1715, it is the few and far between cases that go to IP's that cost more, But of those few cases that go to IP's then as longterm planner says the costs can be quite high.

There is still a class of creditors that get a preference most usually employees but mostly creditors are in the non preferential type who are all treated equally.

If the OR thinks that a separate trustee should be appointed then they can vote on who should be appointed. It is at this point normally that a creditor would be asked to prove their debt so that an accurate count can be made of their voting rights, the other time they will be asked to prove their debt is if their is a payout and the OR needs to assess all the claims.

elljay

Thank you. Oh dear, I didn't realise they would get all of this information. It's just the ultimate humiliation. Oh dear.

Thanks

alastairq

elljay wrote: »

Thank you. Oh dear, I didn't realise they would get all of this information. It's just the ultimate humiliation. Oh dear.

Thanks

Try not to view bankruptcy with such a negative attitude.

After all, once the Petition is granted , you will cease to have any input with your [ex] creditors.

As far as you are concerned, you start afresh.

Your creditors are no longer allowed any interaction with you.

This is how Bankruptcy protects you.

elljay

Thanks. No I'm not negative in general, I went bankrupt a week ago and although not a great experience it was less bad than the weeks leading up to it. I knew that with an IVA creditors know who is owed what, but didn't realise that also happened with bankruptcy. I'm not bothered about banks and other faceless institutions knowing about each other, such as utilities etc, it's just that one of my creditors was known to me personally and while I might never come across him again, he was a really nice guy and helpful and obviously thought I was worth trying to help, once he sees my other debts he's going to think badly of me, or worse, feel really sorry for me.

Oh well, oh dear, as I said!!

debtinfo

That's one way to look at it. Another might be that when he gets the report. He will see what you were struggling against how little money you would have had to live on whilst trying to keep your creditors happy and how long you must have been struggling with it.