Q. What happens if I go bankrupt?

A person can make themselves bankrupt (known as a debtor's petition) or someone who is owed more than £750.00 by that person can petition the Court for them to be made bankrupt (known as a creditor’s petition). The outcome of either process is exactly the same and in simple terms the result is that any assets of value owned by that person have to be sold in order to pay the costs of the bankruptcy and pay all creditors as much as possible. It is important to realise that it is not simply a case of selling enough assets who made you bankrupt but rather bankruptcy means all assets have to be turned into cash to pay all creditors even if this means realising assets which are worth more than the level of your debt. There are ways of getting out of bankruptcy such as annulling your bankruptcy or entering into an IVA. If you are considering issuing a bankruptcy petition against someone who owes you money or if you are considering making yourself bankrupt please contact our bankruptcy department to arrange a free initial consultation to discuss whether this is an appropriate way for you to proceed.
 

Q. What is an IVA?

An IVA is an Individual Voluntary Arrangement. This is essentially a formal proposal which a person can put to all of his creditors as a means of settling their debts. A debtor will normally need to instruct an insolvency practitioner to assist in the preparation of this proposal and the convening of a meeting of creditors so that a vote can be taken as to whether or not the creditors are willing to accept same. A person would normally propose an IVA to his creditors if he was faced with the prospect of being made bankrupt, however it is also possible to propose an IVA after you have already been made bankrupt. The basis of the proposal is normally to set out to your creditors the expected outcome for them in financial terms if you were made bankrupt and then offer them a more attractive alternative. If you would like to explore whether an IVA is right for you please contact our insolvency department to arrange a free initial consultation.

Q. When am I discharged from my bankruptcy? 

Provided that you have cooperated with the Official Receiver and any Trustee in Bankruptcy since you were made bankrupt then it is likely that you will have been automatically discharged from your bankruptcy 12 months after you were made bankrupt. This is an automatic discharge and you should not expect to receive any notice from the Court or the Official Receiver that this has occurred. If you require proof of your discharge then please contact our office.However, if you have no cooperated in your bankruptcy then you may have received notice that your discharge from bankruptcy has been suspended. In such cases it will be necessary for you to make an application to the Court to have the suspension lifted otherwise you will always be considered to be an undischarged bankrupt. This could have implications for assets that you acquire in the future and any future change in your financial circumstances. If you have any queries as to whether or not you have been discharged from your bankruptcy or if your discharge has been suspended and you wish to make an application to have same lifted then please contact our firm’s bankruptcy department to arrange a free initial consultation to discuss the process.

Q. Can I save my house if I go bankrupt? 

If you are the sole or joint owner of a property then you will lose your interest in that property if you are made bankrupt. However, it may be possible for you or a family member or joint owner to buy back the interest that you have lost from the Official Receiver or any Trustee in Bankruptcy. If you have been made bankrupt and wish to explore the possibility of purchasing back any interest in an asset or property then please contact our bankruptcy department to arrange a free initial consultation to discuss the feasibility and process for doing so.

Q. How do I make myself bankrupt? 

If you are in financial difficulty you may be considering making yourself bankrupt. This involves making an application to the Court setting out your financial circumstances and requesting that a Bankruptcy Order be made. In practise this is a very quick procedure and it is not strictly necessary to instruct a solicitor, however some clients prefer to do so as they require assistance in completing the forms, filing the papers in Court and attending the hearing. If you are considering making yourself bankrupt and wish to discuss what the process entails then please contact our bankruptcy department.

Q. Can I go on holiday if I am bankrupt? 

If you have not yet been discharged from your bankruptcy then the current legislation states that you cannot leave Northern Ireland to travel to Great Britain or the Republic of Ireland without the prior written consent of the Official Receiver. An undischarged bankrupt cannot travel beyond Great Britain or the Republic of Ireland without the permission of the Court. To obtain this permission it will be necessary to make an application setting out in great detail the purpose of the trip, who paid for same and when you intend to return. If you require our assistance in making such an application to the Court then please contact our bankruptcy department.

Q. Can I continue working if I am Bankrupt? 

In general you should not be prevented from continuing to work whilst you are bankrupt, however any income which you earn and which is above what is deemed to be sufficient to meet your living requirements can be claimed by the Official Receiver or any Trustee in Bankruptcy under an income payments agreement or an income payments order which can last for up to three years. If you have any concerns regarding your ability to work or the level of your income please contact our bankruptcy department to arrange a free initial consultation.

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