When some people reach a certain level of debt they have no other choice but to file for bankruptcy. This is an option which should be avoided for as long as possible because of the difficulties it can cause for a person when applying for credit in future. A person can file for bankruptcy by themselves if they are absolutely unable to pay their debts or a creditor can apply for a person to become bankrupt if the person owes them 750 or more and the person has made no arrangements to pay their debt.
A court must declare a person bankrupt and once they do so the details of that case will be sent to the government's departments for dealing with bankruptcy matters which is known as the Insolvency Service. The case will then be handed to the closest official receiver's office who will hold your assets and finances until they can be distributed amongst your creditors.
The person being made bankrupt must attend an interview with their appointed receiver and provide evidence of all of their finances. This includes any debts they might have excluding student loans and court fines, any assets they have and any existing money they have. The receiver will then make contact with the creditors whom the person has debts with and explain what will happen next.
A person will also have to sign to say that agree with the restrictions of becoming bankrupt. Upon doing so they will have to disclose their financial information to the receiver including bank and credit cards. They will have to cooperate entirely with the receiver whilst they go about their business and they also have to stop making any payments to creditors.
The appointed trustee is responsible for making sure that creditors receive as much of the money they are owed as possible. Any assets the person has will be sold, added to any existing finances they have and then split between the creditors accordingly. Once this is done the person is not debt free however. Should they have any spare income for the next three years, they may still be ordered to contribute that income to any debts still outstanding.
A court must declare a person bankrupt and once they do so the details of that case will be sent to the government's departments for dealing with bankruptcy matters which is known as the Insolvency Service. The case will then be handed to the closest official receiver's office who will hold your assets and finances until they can be distributed amongst your creditors.
The person being made bankrupt must attend an interview with their appointed receiver and provide evidence of all of their finances. This includes any debts they might have excluding student loans and court fines, any assets they have and any existing money they have. The receiver will then make contact with the creditors whom the person has debts with and explain what will happen next.
A person will also have to sign to say that agree with the restrictions of becoming bankrupt. Upon doing so they will have to disclose their financial information to the receiver including bank and credit cards. They will have to cooperate entirely with the receiver whilst they go about their business and they also have to stop making any payments to creditors.
The appointed trustee is responsible for making sure that creditors receive as much of the money they are owed as possible. Any assets the person has will be sold, added to any existing finances they have and then split between the creditors accordingly. Once this is done the person is not debt free however. Should they have any spare income for the next three years, they may still be ordered to contribute that income to any debts still outstanding.
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