Credit Repair - Bankruptcy Part 1 | No Debt Anymore .org

Credit Repair - Bankruptcy Part 1

Please note it is your responsibility to evaluate the accuracy, completeness and usefulness of any information, opinion or advice contained in the content below.

Credit Repair-Bankruptcy by Steven Hay

Part 2 and Part 3 will be featured tomorrow.

What is Bankruptcy?

Bankruptcy is one of the more effective ways to deal with debts you cannot afford to pay. Once you declare that you are bankrupt, all assests in your possession will be used to pay your outstanding debts. After a period of one year, all your remaining debts will be written off and you can start anew. You can either file your own petition of bankruptcy or your creditors can do it for you. Either way, the effects are the same. Most of the Bankruptcy rules in effect have changed since April of 2004 when the Enterprise Act was approved.

How to go Bankrupt

Filing your bankruptcy petition

A petition for bankruptcy is readily available in your local County Court. Processing the petition may cost about £310 deposit and £150 court fee. These fees should be paid along with the submission of your petition. If you are on low income or on certain benefits, you can be awarded exemption from paying those fees.

Only the larger County Courts accept bankruptcy petitions. Although you are obtaining the form from your local County Court, you will need to take a trip to the High Court to submit the form. If, for example, you reside in central London, you will have to go to the High Court to submit your petition. The District Judge will usually call for a hearing that same day to decide whether it is appropriate to issue the order or not.

Once the order is made, you will get in touch with the Official Receiver who deals with your bankruptcy and report to him all your personal details. The information that you will be asked about usually pertains to your finances including your incomes, expenses, assets, Insurance policies, and Pension policy details.

A creditor making you bankrupt

Your creditor can file a petition for your bankruptcy if you owe him £750 or more, which you are not able to pay dutifully. If you have several creditors, they may join forces to file for your bankruptcy although this is rarely done. You can also be made bankrupt if your Individual Voluntary Agreement (IVA) fails.

Before a petition of bankruptcy is filed in court, your creditor will first send you a “Statutory Demand”, which will ask you to pay your debt either through installments or through the property you own.

The Statutory Demand is usually used by creditors to force its debtors pay the amount they owe immediately without any intention of filing for bankruptcy. This is because no amount is required for filing a Statutory Demand while filing for Bankruptcy charges fees upfront.

Within twenty-one days, the creditor and debtor must reach an agreement otherwise, a bankruptcy order may be filed in court. If your debt is less than £750 or there is an ongoing dispute about the money you owed, you can apply to have the Statutory Demand set aside.

ADVICE - Statutory Demands

Once you receive a Statutory Demand, your next move should be to check if you can have it set aside.

Do I have Assets?

Once you are declared bankrupt, the Official Receiver or appointed trustee may rule out to sell all your assets to pay for your debt.

INFORMATION - Please know that certain items or goods are not counted as assets. These items are basically your domestic needs such as clothing, bedding, furniture, and household equipment. Items that are necessary for you to carry over your profession or vocation are also not treated as available assets and in effect, cannot be taken away from you. Your antiques or expensive appliances can be given up for auction as well as your car so long as it is not needed in your profession. In some cases, a car that is necessary for employment is sold and is substituted by a cheaper one.

All your assets that have been discharged from your possession must be sold as soon as possible. If any of them remains after you have been released from bankruptcy, they will still no longer belong to you. The Official Receiver will continue to take possession of them until all of them have been sold.

INFORMATION - Assets

The only asset or valuable that is treated differently is your home. For details, see below.

Bankuptcy and Hire Purchase Agreements

A clause in the hire purchase agreement states that you will have to return the item once you are declared bankrupt. This means that your contract with the company will be terminated altogether. In some cases, however, you can be allowed to continue ownership by making payments dutifully even while you are declared bankrupt.

Pensions

If you went bankrupt before May 29, 2000, your personal pension could be taken in as an asset. This means that you will receive no lump sum or weekly payments in the future. This rule has been changed, however. Therefore, if you went bankrupt after May 29, 2000, your pension, may it be personal or occupational, should be left untouched. Some debtors used their pensions to stop creditors from taking away their savings. In this case, the pension fund may be lost to the Official Receiver.

Property and your home

A property or home is an asset that is treated differently. If it is yours alone, it can be forfeited to be sold regardless if it has any equity in it or none. If you are living in it with your spouse and your children, the sale will be delayed for a year to give them sufficient time to find somewhere else to live. Once you go bankrupt, your interest in your property is naturally transferred to the Official Receiver. If you co-own it or in some form of joint ownership, the Official Receiver should only take away your equity share. This is also known as your “Beneficial Interest”. In certain circumstances, you can be considered to have a beneficial interest even when you are not named in the mortgage. In certain circumstances as well, your co-owners can make an offer to the Official Receiver to buy out your equity share so the house will remain intact.

For more information visit Credit Repair
USA or Credit Repair UK

UPDATE 1-Hungary to slash govt debt sales, market illiquid - Reuters

10 Oct 2008 at 3:07am
BUDAPEST, Oct 10 (Reuters) - Hungary's debt agency AKK announced plans on Friday to cut net government debt sales by 200 billion forints ($1.09 billion) over the rest of the year, but the government debt market was at a near standstill. "There is no ...

After the fall, the fall! - Chicago Sun-Times

4 Oct 2008 at 2:45am
Now, reality sets in! The bailout/rescue plan will work only if banks take the liquidity that is coming their way and use it to make business and mortgage loans that will get the economy moving again. Over this weekend, the global credit markets will ...

Financial crisis has made local institutions more prudent - Barbados Advocate

5 Oct 2008 at 5:25pm
CEO of the Caribbean Credit Bureau Limited (CCBL), Bianca Williams, has argued that the current international financial credit crisis has resulted in a number of financial institutions becoming more prudent and employing stricter lending practices ...

US casino stocks hit new lows as credit woes bite - Forbes

7 Oct 2008 at 12:00pm
LOS ANGELES (Reuters) - Shares of casino stocks hit new lows Tuesday as credit markets remain frozen and the specter of higher debt costs on top of ever-weaker consumer spending lead analysts to lower prospects for the sector. Shares of Las Vegas ...

Consumer Board issues ?Fiscal Crisis Watch List - Empire State News

5 Oct 2008 at 5:53pm
ALBANY - Even with Friday?s Congressional approval of a $700 billion bailout package, the current fiscal condition has many consumers worrying about their fiscal health. Therefore, consumers may be left vulnerable to opportunistic individuals who ...

Free Newsletter

Sign up for the free Daily newsletter, filled with tips and ideas on avoiding credit card debt, credit history, tips on getting out of credit card debt, and more. Your email address will be kept confidential and won't be shared. Easily unsubscribe at any time.

If you enjoy the free information available on this site, you're sure to enjoy the free newsletter as well:

Site Search Tags:

Share and Enjoy:

January 15 2008 12:46 am | Bankruptcy and Credit Repair

Trackback URI | Comments RSS

No Debt Anymore .org

Advice on credit repair, credit reports and debt solutions