Bankruptcy is a legal procedure whereby an insolvent individual may address the fact that he or she is unable to pay their debts. Through this procedure, the debtor can have his or her debts fully or partially written off within a finite period of time. A creditor may petition the court for the debtor\u2019s bankruptcy or the debtor may petition the court for their own bankruptcy. The cost of initiating this procedure is currently about \u00a3600 in England, Wales and Northern Ireland.<\/p>\n\n\n\n\n\n\n\n
Responsibility for addressing the debts of the bankrupt person falls \nto the Official Receiver who may appoint a Trustee to undertake the \ntask. The assets of the bankrupt individual are sold and the proceeds \nare used to pay the further fees and costs of the bankruptcy process \nand, with any funds remaining, to repay creditors. Assets normally \ninclude property such as a house or land or a car. The debtor would be \nallowed to retain reasonable household items such as clothing, bedding, \nhousehold equipment and other such basic living necessities. A low value\n car may also be retained if necessary for driving to work or for \nessential family transport needs.<\/p>\n\n\n\n
The bankrupt individual may also have to contribute his or her \ndisposable income for up to three years via an Income Payments Order \n(IPO) or an Income Payments Agreement (IPA). Discharge from bankruptcy \noccurs within one year (unless the debtor has been bankrupt before or \nhas been found to have acted fraudulently or has failed to co-operate \nwith the Official Receiver or the Trustee). Notwithstanding the one year\n discharge, the IPO or IPA continues for three years. The debtor\u2019s \ncredit file is also affected negatively for six years from the date of \ndefault, which often coincides with the date when the bankruptcy \ncommenced but can precede that date. When the six years have elapsed, \nrecords of defaults are removed from the debtor\u2019s credit files and he or\n she can begin to restore their credit worthiness.<\/p>\n","protected":false},"excerpt":{"rendered":"
Bankruptcy is a legal procedure whereby an insolvent individual may address the fact that he or she is unable to pay their debts. Through this procedure, the debtor can have his or her debts fully or partially written off within a finite period of time. <\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_robots_primary_cat":"none","_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","footnotes":""},"categories":[2],"tags":[],"class_list":["post-12042","post","type-post","status-publish","format-standard","hentry","category-bankruptcy-articles"],"_links":{"self":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/comments?post=12042"}],"version-history":[{"count":1,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12042\/revisions"}],"predecessor-version":[{"id":12051,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/posts\/12042\/revisions\/12051"}],"wp:attachment":[{"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/media?parent=12042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/categories?post=12042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nationaldebtrelief.co.uk\/debt-articles\/wp-json\/wp\/v2\/tags?post=12042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}