How can I be made bankrupt and what then happens?

A debtor (i.e. the person in debt) can apply for his own bankruptcy. You complete an Application, a Statement of Means and you pay the not insubstantial fee and deposit (unless you are exempt from fees). You will be given an appointment to appear before the District Judge at the County Court and if the Order is made, you will be summoned to attend at the Official Receiver's Office for a meeting with him to discuss your financial situation and how the bankruptcy will work. You will be informed that you cannot act as a Director of a Limited Company whilst bankrupt. You are very restricted as to what credit you can take, and you banking arrangements will be more restrictive. It will drastically affect your credit record/scoring. But generally you will be discharged a year later, your previous debts generally having been wiped out. there are many other issues that arise but this is a general overview of what bankruptcy means.

If you don't petition for your own bankruptcy, one of your creditors can do so if the debt is more than £750. If they do petition, they will generally precede this with issuing a demand for payment, known
otherwise as a Statutory Demand. This gives the debtor one last chance to pay or come to some financial arrangement.

Bankruptcy will wipe out most debts of the debtor and allows him, to a certain extent, to make a fresh start.

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