Questions about Bankruptcy

a7788 · 28 February 2016 at 8:02PM

Hi all,

I'm sorry if these questions has been answered before but I couldn't see anything.

I am working with a charity who has advised the best option for me is bankruptcy. I have been looking online but I can't really find definitive answers.

1) What exactly is bankruptcy, as in the debt gets written off but do you still have to pay or as soon as you're made bankrupt you stop paying?
2) As I understand it, you're bankrupt for a year then on the file for the rest of the time.
3) After 6/7 years does the bankruptcy stay on your credit file or does it "fall off"?
4) Will I have to close my bank account? I don't have an overdraft, and no debt with my bank.

I probably have more questions but will start with that.

Thank you!

Cobalt77 · 28 February 2016 at 8:49PM

Here you go:

1. Read this: http://www.stepchange.org/Howwecanhelpyou/Bankruptcy.aspx
2 & 3. The usual BR period is 12 months, and it remains on your credit report for 6 years after the actual date you were made BR.
4. You are allowed to have a "basic" bank account while BR. This is essentially a current account with NO credit facilities (e.g. overdraft or cheque book) but otherwise it's the same - e.g. mobile, online, telephone banking etc.

HTH

Johnsmith2016 · 28 February 2016 at 10:42PM

1) What exactly is bankruptcy, as in the debt gets written off but do you still have to pay or as soon as you're made bankrupt you stop paying?
2) As I understand it, you're bankrupt for a year then on the file for the rest of the time.
3) After 6/7 years does the bankruptcy stay on your credit file or does it "fall off"?
4) Will I have to close my bank account? I don't have an overdraft, and no debt with my bank.

1. Yes unsecured debts can be written off. You no longer pay the debts, but could be subject to an IPO depending on what you earn vs outgoings.
2. You are bankcrupt and subject to the restrictions for 12 months, then you get discharged.
3. falls off credit report after 6 years, but some lenders will ask have you ever been insolvent.
4. Depends OR will normally declare no interest in your current account, so its up to the bank, some freeze them some dont. Either way if they do just open a basic account with barclays or nationwide

Johnsmith2016 · 28 February 2016 at 10:47PM

Also - as soon as you are bankcrupt this gives you protection from your creditors, the can no longer/should not chase you, they have to deal with the OR as they take control. Go to citizens advice for help filling in forms, book your day in court, attend with your fee £525 or £705 speak with OR a week later, set up a ipo if required, then should go fairly quiet until discharged 12 months later. At which point get your dishcharge letter, start credit file clean up and get accounts marked as satified.... Enjoy the rest of your life