From the 1st April 2004 the law concerning bankruptcy will change. The usual term for bankruptcy was previously 2-3 years. From 1st April 2004 most bankruptcies will be discharged within 12 months.
The purpose for the changes is so that those who have been unavoidably made bankrupt for genuine reasons are given a better chance to start again.
The change in this law will only apply to those who are bankrupt for the first time. Those who have been bankrupt in the past will need to apply to the court to be discharged 5 years after the latest bankruptcy order.
If you are currently bankrupt, and your bankruptcy term will go beyond 1st April 2005, you should be discharged one year from 1st April 2004. If you are currently bankrupt and your bankruptcy order finishes in less than 1 year from the 1st April 2004, the order will end as normal.
Other significant changes relate to the treatment of assets. Whereas previously there was no time limit, The Act sets a limit of 3 years on the period during which the trustee in bankruptcy can deal with a bankrupt's interest in a home which is the sole or principal home of the bankrupt, the bankrupt's spouse or a former spouse. After this period it will revert back to the bankrupt (i.e. it will no longer form part of the bankruptcy estate).
The cost of a petition to be made bankrupt has also changed from £390 rising to £450 from 1st April 2004.
With the new Bankruptcy Law, it would be interesting to know how many people would be more inclined to go for Bankruptcy rather than an IVA, (Individual Voluntary Arrangement). What are your views and what would be the deciding factors?
Post your comments here and vote on the poll.