What Happens After Bankruptcy?

Our previous article was entitled ‘How to go Bankrupt’. This article looks at the aftermath of becoming bankrupt. After the court makes a Bankruptcy Order against a debtor, the Official Receiver immediately takes over the responsibility for administering the bankruptcy including the task of protecting the bankrupt’s assets. The Official Receiver is a civil servant in The Insolvency Service and is an officer of the court and acts as the bankrupt’s trustee unless the court appoints an Insolvency Practitioner (IP) to take that role.

The trustee in bankruptcy is responsible for looking after the financial affairs of the bankrupt for the period before and during the term of the bankruptcy and must report to the court any matters which indicate that the bankrupt may have committed criminal offences in connection with the bankruptcy. For more information regarding the bankrupt’s dealings with the Official Receiver in England and Wales, look up The Insolvency

Service website at www.curadebt.com/insolvency and read the downloadable publication ‘What happens when you are interviewed by the Official Receiver? For Northern Ireland look up the website of The Insolvency Service of Northern Ireland www.curadebt.com/freeconsultation

Bankruptcy imposes certain mandatory duties on the bankrupt. To begin with you must provide information to the Official Receiver about your financial affairs as soon as possible after the Bankruptcy Order is made and you may also have to attend an interview at the OR’s office at a later date.

You must collect and hand over to the Official Receiver all your account books, records, bank statements, insurance policies and other papers relating to your assets and debts. If you receive any assets or any increases in income during the term of your bankruptcy, you must tell your trustee as soon as possible. You must stop using your bank and building society accounts, credit cards and similar accounts straight away. You must not get credit of £500 or more from any person without first telling them that you are a bankrupt. You must not make any payments to your creditors for money that you owed before the Bankruptcy Order was made.

There are sanctions for not co-operating with your trustee and you could be arrested. Generally you will be automatically freed from bankruptcy (discharged) after a maximum of twelve months. Of course if the court should annul (cancel) your Bankruptcy Order at any time, you will become automatically free from bankruptcy; this would normally happen where your debts and the fees and expenses of your bankruptcy have been paid in full or where the Bankruptcy Order should not have been made in the first place.

However, in some cases your discharge from bankruptcy could be suspended (postponed). For further information in England and Wales, look up The Insolvency Service website at www.nationaldebtreliefreview.com/insolvency and read the downloadable publication ‘When will my bankruptcy end?’ For Northern Ireland look up the website of The Insolvency Service of Northern Ireland www.detini.gov.uk