Bankruptcy is normally
a last resort and only advisable in extreme conditions, it
is one way of dealing with debts you cannot pay.
A bankruptcy order can:
Free you from un-manageble debts
so you can make a fresh start, subject to some conditions.
Make sure your assets
are distributed fairly amongst your creditors. Anyone
can go bankrupt, including individual members of a partnership.
There are different
legal procedures for dealing with companies and for partnerships
themselves. An individual can be made bankrupt in any of
the following three ways.
An individual making an application
to their local County Court.
This can be an applicaition
to a County Court by one of your creditors, who is owed
more than £750.
This normally takes place after an in-depth
consultation to determine the problems and where there
is no other solution.
What are the implications of bankruptcy?
You lose control of any assets
you have.
You cannot obtain credit
without the permission from the lender.
You cannot work as a company director.
You cannot take any part in formation, management
or promotion of a limited company (LTD) without the permission
of the court.
You cannot trade in any business under any
other name unless you inform all persons concerned of
the bankruptcy.
You could potentially lose certain professional
qualifications.
Your credit rating maybe affected for many
years after you have been made bankrupt.
You may be publicly examined in court regarding
your financial matters.
What are the advantages of bankruptcy?
For the person involved, bankruptcy
provides relative peace of mind and possible automatic
discharge after 12 months.
For the creditors, bankruptcy
allows a full investigation of the debtor´s situation
and financial affairs.
