When it Gets Tough

What is bankruptcy?

Bankruptcy is a legal term which applies to an individual who has declared themselves personally insolvent, or who been served a court order by a creditor who is owed at least £750. It is usually a last resort, as bankrupt individuals have to surrender assets like valuables and property to an insolvency practitioner to settle their debts, and will almost certainly have to close any business they run. They will also face restrictions on their position in future businesses and will undoubtedly experience difficulties in obtaining credit. However, in certain circumstances, bankruptcy can be a positive thing, meaning a fresh, debt-free start.

In the case of a first time bankruptcy, a Bankruptcy Order will usually last for a term of 12 months. During the period of bankruptcy, a bankrupt is prohibited from:-

(i)  Acting as director of a company

(ii) Obtaining credit of £250 or more without disclosing that a Bankruptcy Order has been made

(iii) Carrying on business using any name other than that in which the Bankruptcy Order was made.

If you would like to know more about the bankruptcy procedure, and the restrictions that apply to a bankrupt individual, please email mail@harris-lipman.co.uk or call (020) 8446 9000.

 

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