Can I declare my own Bankruptcy? If so how?

This is a question often asked by those who are having debt problems. Since the credit crunch bite in about October 2007, many thousands have seen their ability to pay back debt that they built up in the good times.

Very many have opted to enter simple debt management plans, which can be entered into without penalty when they are ended, if circumstances change.

County Court

Beginning a bankruptcy starts with finding out in which County Court you need to present your petition. Not every county court has what is known as bankruptcy jurisdiction. A call to your local county court and quoting your postcode will allow them to direct you in the right direction.

Documents

You next need to complete your paperwork. The Petition is a mere two pages long and can be completed quite simply. The statement of affairs is longer, running to 35 pages with a whole range of questions. If you feel you need help completing this, there are companies who for a modest fee will help you complete the questionnaire.

When these are completed in full, you need to make three copies. Photocopies are acceptable. It would be better however to produce the forms on a computer and either print off a copy and photocopy it, or print three from a printer. All forms can be downloaded and saved from the government Insolvency website. If you do not have access to a computer, you local court will be able to give you a pack.

Fees

If you are not in receipt of income support you will need to pay a court fee of £150. In addition no matter what your income you will also need to pay the Official Receivers deposit of £360. This goes towards to costs of processing your bankruptcy. These fees are paid at the presiding court when you issue your petition.

Hearing

You need to check carefully what system of hearings your court operates. Some courts, have a turn up and issue system, followed by a hearing later that morning, others have a booking system, which may extend many weeks ahead, others have a system where you file your papers one day and come back for the hearing the next day.

All courts are also different as to how they then make the order. Some courts will simply take the papers to a District Judge who will make an order without seeing you. Others will want to see the bankrupt before making the order.

The Official Receiver

After the Order is made, the OR will call you to arrange an interview. This will take place either in person or over the telephone. It lasts between 1 and 3 hours and takes the form of asking questions on the statement of affairs. You may or may not be asked to agree and income payments agreement. This is where you agree to pay the OR a small amount from your disposable income for 36 months. This is entirely dependent on whether you have spare income left after paying all your bills.

When your debts keep accumulating and are getting out of control, then declaring bankruptcy may just help get you out of this mess. When you take this step, it is a legal indication that you are unable to repay your debts. Once you declare that you are bankrupt, the law stops the creditors from collection of their debts or harassing you. This buys the debtor time to organize himself. Often, most of the debt is written off and the debtor is only required to repay a small percentage.

Declaring bankruptcy also gives one a fresh start. Since you are now debt free, you have a chance to rebuild your finances and avoid debts. When you decide that this the best option for you, you have to be aware of the consequences.  You have to face the fact that your credit rating will be affected for up to ten years. This can make it difficult for you to get a loan or buy a home in the future.

Declaring bankruptcy can also help you get out of credit card debts and medical bills, without putting your home and retirement accounts at stake. Unfortunately though, not all debts are wiped out. Student loan debts and income taxes cannot be wiped out by declaring bankruptcy.

If you decide that this is the best debt solution for you, you should try and make the process as smooth as possible. One way of doing this is by getting in touch with your local court. You can get the relevant documents from the court and ensure that you book an appointment when you will have your case heard.  Acquire the services of a qualified bankruptcy attorney who can guide you on how to fill out the paperwork correctly and can advice you on the best type of bankruptcy that works best for you. Remember, when you decide to declare bankruptcy, it is a last option when you feel your case is extreme.

Bankruptcy is a lengthy insolvency procedure; you should always seek information about alternatives and ensure that these options have been fully explored.

If you are looking to discover how to declare bankruptcy, it is essential that you get bankruptcy advice so you are aware of the bankruptcy process and the risks involved.

Any UK resident who incurred the debts in the UK can declare bankruptcy. But you can also be declared bankrupt without your permission, as creditors can take you to court for as little as a £750 worth of debt.

To declare bankruptcy, you will have to appear in Court in person so that you can present your Bankruptcy application documents which are:
Bankruptcy Petition – Where you petition your bankruptcy and state the reasons wanting to declare bankruptcy
Statement of Affairs – Will detail your assets, liabilities and contact details of all creditors. It is also your declaration of insolvency that you will need to swear on oath.

To declare bankruptcy you will have to pay a court fee. It is possible that the Court fees can be reduced if you are on certain benefits. Currently you will have to pay:
£345 towards the administration of your bankruptcy order
£150 court fee, which may be paid if you are on benefits
£7 for swearing of the statement of affairs in High Court or before a solicitor

After you have presented the documents and paid the court fees, the next step in how to declare bankruptcy is to have a meeting with the District Judge who will decide whether bankruptcy is the best debt solution for you. If it is, your bankruptcy will often be declared on the same day,

You may be asked to have a meeting with an Official Receiver, who will decide how long your bankruptcy order should last (typically 12 months) and  whether to sell your assets and if you can afford to make a additional contributions with an Income Payments Order.

Always seek ethical and expert bankruptcy advice when declaring bankruptcy as there could be other debt solutions which means you do not need to worry about how to declare bankruptcy, and therefore avoid bankruptcy disadvantages.

Different people have different financial conditions and each one has their specific problems. If you are one of those people who is neck-deep in debt with no possible signs of paying them back, then there is the option of bankruptcy for you. If you are able to declare yourself bankrupt, all your existing credits will be absolved and you will be given a second shot at life. But there are far-reaching effects of this in the form of credit rating. When you are declared a bankrupt, all your credit ratings will be discarded and you would not avail of a loan for 10 years. In this case, is it still wise to manage a do-it-yourself bankruptcy?

Due to the above mentioned reasons, it is very necessary that you consult a good lawyer who will be able to provide you with appropriate advice. Though this might seem like a unnecessary expense when you are already bankrupt, hiring a lawyer is a smart move. The lawyer will be able to advise you whether you should take this drastic step, after looking through your finances. Also, there are a lot of new rules which have been incorporated into bankruptcy laws since 2005. This has made filing for bankruptcy on your own ever more impossible.

You should know that there are a couple of chapters under which you can file for bankruptcy. You can be declared a complete bankrupt under chapter 7 while you are accorded a leverage time of 3-5 years in the case of bankruptcy under chapter 13. After having a go through your finances, your lawyer will be able to tell you which bankruptcy will be beneficial for you. This is an important step as this will help you to get you life back on tracks instead of squandering it away even more.

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Bankruptcy is often thought of as something to be avoided at all costs. However, if you have unsecured personal debts which you cannot repay, it could the best way to solve your financial difficulties.

According to the Insolvency Service, approximately 6000 people declare bankruptcy every month in England and Wales. Once declared bankrupt, an individual’s debts are taken away from them and after a year, written off completely. Despite this, many people write off bankruptcy as a solution to resolve their debt because they believe that it will mean that they will lose their home and possessions.

The reality is that in very many cases this is just does not happen and bankruptcy is often the best option to resolve an unsecured debt problem.

Tenants are unlikely to lose their property

If you are a tenant you can declare bankruptcy with little or no risk of losing your home. If you rent from the local Council or Housing Association, then as long as you maintain your monthly rent payments, you will certainly be able to stay in your property if you are bankrupt.

If you rent privately, your landlord will be told that you are bankrupt. The majority of private landlords will not have a problem with this as long as you maintain your rent payments.

Property owners with no equity

The worry about bankruptcy if you are a homeowner is that you will have to give up any equity you have in the property. This very often means that the house has to be sold. However, if you have little or no equity, you will normally be able to keep your house. In these circumstances you can buy back the title to your property for a nominal fee meaning there is no risk to your property in the future either.

Will I lose personal possessions?

It is a myth that if you declare bankruptcy, things such as your washing machine, TV and furniture will be taken away. Household goods will only be taken if they are extremely valuable (for example an expensive painting or antique furniture). As such, the majority of people do not have to worry about losing any of their personal possessions

The only asset that does need to be considered carefully is a private car. If you own a car valued above £1,500 it may be at risk. However, this does not mean that you will automatically lose the vehicle. If there is a specific reason for its requirement, you may be able to keep it. Alternatively a friend or family member could offer to pay any amount of its value over £1,500 thus avoiding its loss.

What if I am a Director?

There are of course some occasions when bankruptcy may not be the right option. This is particularly the case for company directors. If you are a director and wish to remain in this position you cannot declare bankruptcy. Bankrupt individuals are not allowed to act as company directors or act in the capacity of managing a limited company for the period covered by their bankruptcy (normally 12 months).

In addition, there is a certain amount of publicity surrounding bankruptcy. As a bankrupt, your name is advertised in the local newspaper. In addition you are added to the insolvency register which is publicly accessible via the internet.

Clearly, bankruptcy is not right for everyone. However, it is an extremely useful debt solution for many people and certainly should not be overlooked because of misconceptions based on a lack of understanding.

If you are struggling with unsecured personal debt, you should certainly familiarise yourself with bankruptcy and whether it might be right for you.