IN SIMPLE TERMS, WHAT IS INVOLVED IN THE BANKRUPTCY
PROCESS?
There is a bankruptcy court for each
judicial district in the country.
The Insolvency Rules 1986 (“the Rules”) govern
the procedural aspects of the process.
The procedure begins with the filing of a
Petition and a cheque in the sum of £450.00
(this comprises £150 Court Issue Fee and £300
for the Official Receiver’s Deposit.
Please note that the deposit is refundable
if no Bankruptcy Order is made although the
Court Issue Fee not) with the Bankruptcy Court
in your area. The filing of the Petition will
not stop your creditors from suing, grabbing
your wages, emptying your bank account or
telephoning. A date will automatically be
set for the Hearing of the Bankruptcy Petition.
Unless the debtor can come to an arrangement
with the petitioning creditor or provide adequate
reason why the Court should either dismiss
or adjourn the matter further, the Court is
under a duty to make a Bankruptcy Order.
The Official Receiver (“OR”) is appointed
to look after your affairs. He will make an
appointment with you more or less immediately
which you must attend. The Official Receiver
has powers to force a Bankrupt to attend such
a meeting. At that meeting the OR will discuss
with the debtor the underlying reasons for
the bankruptcy and will make an assessment
of the debtors, assets and liabilities.
If there are no assets in the bankruptcy i.e.
the debtor has no assets, then it is unlikely
a Trustee will be appointed. In all other
cases, a Trustee in bankruptcy (“the Trustee”)
will be appointed.
The Trustee sells (“liquidates”) the property
that can be taken from you and splits the
proceeds among your creditors. The effect
of this is that you no longer legally owe
your creditors and they are forbidden from
trying to collect any unpaid percentage.
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