9g Bankruptcy Flashcards
What is the two options of bankruptcy?
- Petition for own bankruptcy
- Petition for others bankruptcy
What is the procedure to petition your own bankruptcy?
- Use online Insolvency Service and fill in application. An adjudicator will review and make a decision normally within 28 days.
What is the procedure to petition someone else’s bankruptcy?
- Must petition the court (normally a creditor will do this).
- Creditor must be owed at least £5,000 and served statutory demand for payment or attempts to enforce a judgement order have not been satisfied.
- Copy must be provided to the debtor.
- Court hearing will normally be within 14 days.
What are the effects of bankruptcy?
- Bankruptcy order will be published in the Gazette.
- Person cannot act as a director or insolvency practitioner.
- Borrow more than £500 without informing the lender they are an undischarged bankrupt.
- Practice as a chartered accountant (ACA restriction not by law).
- Ahy legal action against them re debt will be stopped.
What happens re personal assets after declaring bankruptcy?
Official receiver or other insolvency practitioner will be named trustees of your bankruptcy order and you must hand over your assets to the trustee so they can sell them and distribute proceeds to pay off debts.
You can only keep items needed for a job and basic household items such as bedding, clothing etc but these would also need to be given up if high in value.
What is the order of repayment of bankruptcy debts?
- Bankruptcy costs
- Pre-preferential debts
- Preferential debts
- Secondary preferential debts (HMRC)
- Unsecured ordinary debts
- Interest payable
- Postponed debts (e.g. bankrupts spouse)
- Surplus returned to bankrupt.
When is a bankruptcy order normally discharged?
1 year but may be some restrictions within order for between 2 and 15 years.
What happens when bankruptcy order is discharged?
All debts treated as discharged
