All You Need to Know About Bankruptcy Lawyers and Trustee

Bankruptcy is a debt relief solution for someone who can no longer ensure indebtedness. It is a process that involves undertakings dictated by law. This means that bankruptcy is a legal bond between you as the debtor and the people or organization you owed as the creditors.

This bankruptcy information is intended for residents of England, Wales, and Northern Ireland. You may refer to Scotland sequestration for details about bankruptcy.

Bankruptcy in England and Wales are under the stipulations of the Insolvency Act 1986.

The Insolvency (Northern Ireland) Order 1989 instituted the law in Northern Ireland in series with England and Wales, so bankruptcy in all three countries works similarly.

However, bankruptcy or what is called sequestration in Scotland differs from that of England, Wales, and Northern Ireland.

Bankruptcy is a form of insolvency and is frequently particularly suitable if you’re not able to pay your debts at a given period. Usually, your assets will be auctioned to pay off your debts.

This indicates if your assets are meriting than what you owe, or if all of your monthly earnings aren’t adequate to cover your expenses and debts, bankruptcy is improbable to be the most suited choice for you.

Bankruptcy law in the UK

Following the UK bankruptcy law, you can have a brand new start as creditors will write off your unprotected debts. However, there will be restrictions within the 12 months of your bankruptcy.

If the adjudicator approves your application for bankruptcy, creditors can no longer collect payment or charge interest on your debts. In fact, they can’t take any legal matters against you nor can they contact you during this period.

The OR or official receiver will examine your financial status and debt payments over the past few years. In Scotland, the Accountant in Bankruptcy carries out the same responsibility.

Bankruptcy Offense

There are limits and restrictions that you need to abide when you go on bankrupt. You must present the official receiver specifications of all your debts, assets, and income. You can be held liable for a criminal offense if you hide assets or give fraudulent information. Thus, you must be completely honest with the OR or the Accountant in Bankruptcy.

Other Offenses are as follows:

  • Altering your business name to hide your bankruptcy status
  • Borrowing over the allowed £500 without letting them know about your bankruptcy
  • Failure or negligence to submit requested documents to the OR

What are the bankruptcy terms and restrictions?

Bankruptcy usually lasts for one year, but can be prolonged. During this time, you are to follow the imposed restriction for you to avoid extending your bankruptcy. You cannot loan more than £500, which is the allowed amount. Besides, creditors must know that you are bankrupt. Aside from the impact on your credit, bankruptcy also affects your employment, bank accounts, insurance policies, and many more.

If you reside in Northern Ireland, you canno leave the country unless with permission.

Moreover, remember that bankruptcy is also intended to ease your creditors. Under some circumstances, you will be asked to pay regular payments to your creditors from accessible money you possess after sufficing your essentials needs for the month. This is done through IPA or income payment arrangement, which could last for three years.

Your assets will also be auctioned to pay creditors. However, you’ll be permitted to retain anything considered necessary.

What is a bankruptcy trustee?

A bankruptcy trustee is a person who discerns after your bankruptcy. A bankruptcy trustee assumes power over your assets and sells them to allocate payments to your creditors. The trustee is normally the official receiver or Accountant in Bankruptcy managing your bankruptcy. However, they can designate an insolvency practitioner to act on their behalf.

The Power of a Bankruptcy trustee

A bankruptcy trustee has broad jurisdiction to examine your finances if you go bankrupt. Moreover, they can collect payments to pay your creditors, and auctioned your assets.

The trustee has the power to apply to the court in the event that they need to gain additional powers.

Should I get a lawyer to go bankrupt?

 If you are thinking of bankruptcy as the best solution to your insolvency, do not hesitate to contact us for a FREE, unbiased evaluation of your finance and useful advice regarding bankruptcy.