Frequently Asked Questions
Q. Can I have a bank account?
A. There is nothing in the insolvency legislation which prevents a bankrupt from holding an account, although your access to the full range of bank accounts may be limited.
Q. When will I be discharged?
A. If the bankruptcy order was made on or after 1 April 2004 the automatic discharge date is one year. If the bankruptcy order was made before 1 April 2004 different rules apply, full details of which are set out in the publication '
Changes to Bankruptcy Law under the Enterprise Act 2002'.
Q. How do you become bankrupt?
A. A court can declare you bankrupt by issuing a 'bankruptcy order' after it's been presented with a 'bankruptcy petition'.
Q. How will bankruptcy affect me?
A. Assets - Once you're bankrupt, the Official Receiver, or appointed trustee, can sell your assets to pay your creditors. However, certain goods aren't treated as assets for this purpose, for example: equipment you need for your work (eg, tools or vehicles) & household items needed by you and your family (eg, clothing, bedding and furniture).
Q. Do my earnings affect Bankruptcy?
A. The Official Receiver can look at your income (taking into account expenses such as your mortgage, rent and household bills) and decide if payments should be made to your creditors. You may be asked to sign an 'income payments agreement' to pay fixed monthly instalments from your income for three years. If your circumstances change, you'll need to tell the Official Receiver, so they can review these arrangements.
Q. How long does bankruptcy last?
A. Bankruptcy normally lasts for one year. After this time, you'll be 'discharged' from your bankruptcy regardless of how much you still owe. Your discharge could happen earlier if you co-operate fully with the Official Receiver.
Bankruptcy may affect your credit rating and a fee is payable. In addition, fees are payable to the Court by all persons presenting a Petition for Bankruptcy. The amount payable depends on your circumstances.
Any effect on your credit rating may remain on your file for up to 6 years.
