Questions you have before making a decision to go Bankrupt and the Bankruptcy process

Moderators: TalbotWoods, JaneClack

By geroles
#400553 Bankruptcy for 12 months? What happens within them months, financially?
When it is know that you are bankrupt for 12 months, what does this mean within the 12 months?

what happens to your credit card debt, and loan debt, monthly payments??

Do they STOP? or they stop 'after' this 12 period?

if something has to be paid within this 12 month period, then how much is this £? and is it a %?
what is this value based on ?
By chandjay
#400683 Hi,
The minute you are declared bankrupt by the County Court Judge,all your debts are passed to the Official Receiver, meaning you don't "own" your debts any more, the Official Receiver "owns" your debts, so all correspondence relating to your debts(now ex-debts) should be passed to the OR.
You become debt free, but the OR may make an order against you, saying you must pay an IPA (or an IPO) towards the debts you owed.
An IPA (or IPO) usually lasts for 3 years, and the amount you will pay will depend on the disposable income you have, after your living expenses have been deducted from your income.
I know it sounds silly as your bankruptcy last for 12 months, but your payments last for 36 months, unless the Official Receiver deems you cannot afford to pay an IPA (or IPO), in which case the non-payment of an IPA(or IPO) only lasts for 12 months (same as the bankruptcy).
Once you have been declared bankrupt, you do not pay anybody anything at all. All payments are made by your OR, as he/she now owns the debts.
The 12 months you are in bankruptcy just means there are restrictions on what you can and cannot do within that twelve months. For instance, you cannot become a director of a company and you are very limited on what credit you can obtain.

So just to clarify - once you are declared bankrupt, you have nothing more to do with your debts. The Official Receiver deals with everything. And you just deal with the Official Receiver.
By geroles
#401583
chandjay wrote:Hi,
The minute you are declared bankrupt by the County Court Judge,


how long does this take ? min/max days range ?

From the moment you search yellow pages for a bankrupt practitioner, and contact them.

from them processing the forms,

to the minute you are declared bankrupt?


How long does this initial period start? until you are declared bankrupt by the courts ?
By chandjay
#401803 Bankrupt Practitioner ?????
I just phoned up my local county court and made an appointment to see the Judge at the County Court about petitioning for my personal bankruptcy. (it is the Judge who decides whether to declare you bankrupt or not - although it's just usuallly a formality).
I got the appointment about 10 days later(although some courts can be sooner or later).
Meanwhile I downloaded the forms that needed filling in from the internet, and filled them in. The form is several pages, but there is an accompanying letter that explains what information is required, and how to fill the form in, so it was quite easy(just needs thinking about).
Then ten days later I turned up at the County Court and handed over my £700 and my forms to a lady behind a desk. About an hour later, the same lady came to me and handed me my Bankruptcy notice, and told me that the Official Receiver would be in touch, and that was it. I was declared bankrupt. I never saw or spoke to anyone, other than the lady behind the desk at the County Court.
About a week later, I got a letter from the Official Receiver asking me to ring him. I rung him and spoke to him for about half an hour, where he went through all the details of my income and expenditure what I had put on the forms which were handed in to the County Court.
About a week later, I got a letter from the Official Receiver telling me I didn't have to pay anything back towards my bankruptcy as my disposable income was too low. And that was it !! I never heard from anyone again for 10 months, when I got a letter telling me I had been discharged early.
The whole episode was quite easy really(much easier than I thought it would be).
I never saw anyone at all, and just spoke to the OR for half an hour. I still can't believe I got rid of ALL my debts (nearly £40,000) so easily without seeing anyone.
When I look back now, I wish I had done it sooner. I was on a Debt Management Plan for 5 years.
Incidentally, the OR let me keep my car, valued at approx £1000, as I argued that I needed it to find work.

So to answer your question :-
From the minute I asked for an appointment at the County Court, to the minute I was declared bankrupt was TEN DAYS.. and my bankruptcy lasted TEN MONTHS.
By geroles
#401893 Thank you chandjay.

a) Where are these forms? links?

a)
Can you show me the links/websites to all the forms?


b) and who contacts the creditors (banks, credit cards) that you own debt too? the OR or yourself?

c)
and can you chose your OR? or the courts appoint one?

d) and your income/expenditure form, do you have to prove everything you spend your expenditure on? (with receipts etc?)

if you use cash for them? or they don't really need proof, they just need what is on your forms?
User avatar
By JaneClack
#401923 Geroles

You need to talk to someone - I can answer the questions (as can Chandjay) but there may well be other things you need to be aware of and we do not know (and this is not the appropriate place to discuss them).

1) You need to download forms 6.27 and 6.28 from the insolvency website - and before you ask where that is, it is: http://www.bis.gov.uk/insolvency and the forms are at : http://www.bis.gov.uk/insolvency/About- ... -and-wales

2) Once you have presented your forms (as explained by Chandjay) the Official Receiver takes over and he or she contacts all your creditors and undertakes any investigations necessary

3) No, you do not choose your OR or court. You go bankrupt at the nearest local court to where you live which does bankruptcy.

4) You can pay cash - in fact you cannot go bankrupt until you have paid the fees £175 for the court fee and £525 for the bankruptcy deposit.
If you are on benefits you may well be able to claim a remittance on the court costs if you fill in an EX160 but everyone has to pay the bankruptcy deposit.

5) The OR has extremely high reaching powers and can do very detailed investigations - it is not just your word but these things backed up.
By chandjay
#401953 Hi,
Sarah is right about doing investigations and questioning your expenses.
I have a friend who went BR and he was thoroughly gone over and given an IPO for a lot more than he expected.
As for me, the Official Receiver took into account that I had been on a DMP for 5 years, so in his opinion, it showed I had tried to repay my debts.
In all fairness, he did ask me questions(in the phonecall) as to how I had got into so much debt in the first place, but I had anticipated this (thanks to this site), so I had my excuses ready. It was same with my expenditure, I had got it down to a fine art (again, thanks to this site), so I knew exactly what to claim for.
One VERY IMPORTANT THING that the County Court Judge insists on, and that is - That you have taken advice before petitioning for bankruptcy. It is on the formyou fill in, I was asked about it at Court (by the lady who took my money), and I was asked about it by the OR.. So it is important that you get advice.
By geroles
#401963
chandjay wrote:In all fairness, he did ask me questions(in the phonecall) as to how I had got into so much debt in the first place, but I had anticipated this (thanks to this site), so I had my excuses ready.


What excuses did you use, that you used to show why your debt accumulated ?

which 2-3 did were the understandable with ?

chandjay wrote:It was same with my expenditure, I had got it down to a fine art (again, thanks to this site), so I knew exactly what to claim for..


Is that a list of expenses you know you 'can' get a month which they are understandable that you need to spend expenditure on?

[Thanks to this site?] - Is there a list of expenditure you can reference too, which helped you,

Cheers in advance Sarah and Chanjay

(as I am in a distraught stage of emotion :cry: ) - so your detailed answers are helping me. Thanks
User avatar
By JaneClack
#401993 You do not give excuses - you explain. If it is just because you spent too much and did not realise you would not be able to pay it back, then tell him. If you have gambled it pays to be honest - you could end up with a bankruptcy restriction order for being reckless but better to say it than let it be found out. In the section "publications" on the website address I gave you, you can download a booklet explaining these.

You put down what you spend - everyone spends different amounts depending on size of family etc but as long as it is reasonable and you can justify it, it should be accepted. There are no lists as such of reasonable expenditure but things based on the Common Financial Statement - which your budget would conform to if you spoke to the CAB, National Debtline, Payplan or Step Change - which you will find if you click on the red writing below!

You need to cover rent or mortgage, council tax,water rates, electricity and gas or oil etc, television licence, household insurance, food, toiletries, cleaning products etc, clothes, hair, pets, and anything else you spend money on - things like satellite TV should be no more than a basic package. Things like telephones should be no more than certain amounts unless they can be justified.You put down what you spend and this is discussed with the OR at your meeting.

Chandjay will have some additions here but you do also need to discuss this with one or more of the organisations mentioned earlier as we cannot be your sole point of reference
By chandjay
#402053 Yes, sorry Sarah - "...had my excuses ready" was probably a wrong turn of phrase. You're right - of course - I had to "explain" why I had got into so much debt.
So I explained my excuses - ha ha

Hi Geroles,
Because I had been in a DMP for 5 years, and been on this site for advice for over 5 years, I had picked up a lot of advice and tips over that period regarding expenditure.
It's a bit tricky really, regarding expenditure, because you don't want to blatantly lie(in case you get caught out), but also you need to put down and claim for as much as you can(legitimately). But to be fair, the allowances the OR lets you have are fairly generous anyway.
During my 5 years on a DMP, I had contacted Payplan, CAB, and a bankruptcy expert(I met on this site - he had offices in Bolton), so I had been given plenty of advice, all which came in handy when I finally "pulled the trigger."
I'd just like to say this :- The lady at the Bankruptcy Court couldn't have been more helpful and sympathetic, and likewise, the Official Receiver couldn't have been more understanding and considerate. Both tried to help me as best they could, which made the whole process easier to face. Neither of them judged me or treated me as a loser, failure, debtor etc etc. At all times I was treated courteously and with respect (which surprised me a bit).