Bankruptcy

A bankruptcy petition can be presented by an individual when they find themselves in an insolvent position.  A creditor can present a bankruptcy petition against an individual for a debt of £5,000 or more.

On the making of a bankruptcy order, the Official Receiver (a Government official who is a licensed insolvency practitioner) is appointed as Trustee.  Any assets held by the bankrupt automatically vest in the Trustee who has power to realise any assets held by the bankrupt, subject to specific guidelines.  A Trustee will normally be in a position to realise any equity in a matrimonial property within a 3 year period, by sale if all other avenues have been exhausted.

Bankruptcy is a Court driven process and is a matter of public record.  Bankruptcy can be an expensive process attracting statutory taxes on realisations made.  Furthermore, a bankrupt is automatically barred from acting as a company director and from holding certain positions in public office, as well as retaining their professional qualifications in certain circumstances.

An individual is usually discharged from bankruptcy within 12 months, subject to the Official Receiver determining that the debtor has acted properly.