Bankruptcy – Truths and Myths

For most people, debt suddenly spirals out of control, frequently due to circumstances which were unforeseen such as a relationship break up, problems with a business, redundancy, sickness or unemployment. All of a sudden we may find ourselves thrown into a suffocating mountain of debt, struggling to cope with the never ending menacing phone calls and threatening letters all of which are demanding money that we just don’t have, and threatening legal action; this is a really stressful and very frightening time and it is difficult to see a way out, but there is always a way out of debt and Bankruptcy is one of these solutions.

We use Claire Simmons and Paul Reynolds at Debt Helpline UK Ltd  in the area of bankruptcy. We trust them implicitly to offer World Class advice in this area and their service includes court attendance and is a fully hand held service every step of the way. Click on the word Bankruptcy below to go directly through to their site.

Bankruptcy ultimately is legal protection for you, the ‘Debtor,’ being declared Bankrupt automatically makes it illegal for your creditors to harass you in any way, thus relieving you of this pressure.

Bankruptcy as a Debt Solution – is often misunderstood, controversial and generates very mixed reactions; our aim is to decipher a few of the misunderstandings and myths of Bankruptcy and help explain what actually does and does not happen.

What most people find worrying about Bankruptcy – after speaking with lots and lots of people we have found that by far the most worrying aspect of bankruptcy is often the very word itself ‘Bankrupt,’ yet Bankruptcy is fast becoming an acceptable and bona fide debt solution and once the Myths are busted and it is understood what Bankruptcy can actually mean to ‘you and yours,’ you may well discover it is the best solution for your debt. Understanding your situation is everything.

The misconceptions surrounding what may be lost and what is protected in Bankruptcy – It is definitely untrue that being declared bankrupt automatically results in you losing your home, vehicle, job etc. If you are lucky enough to have original oil paintings, expensive Swiss watches or an attic full of antique treasures it is highly likely you wouldn’t need to declare bankrupt, however if you were to then it is also highly likely you will have to forfeit these items for the benefit of your creditors. However, your loved pedigree dog or the beautiful designer dress you bought last year, your furniture or your shiny 60” plasma TV hanging proudly on your wall are all of no consequence when you declare yourself bankrupt, and will not be taken in bankruptcy. You do not have your passport taken off you, you can go on holiday, you are allowed to marry and you are allowed to run a business and continue working. Any myths that concern you please do not hesitate to contact us on 0800 612 2472.

What debts are included and excluded in Bankruptcy – All unsecured debt, with some exceptions, will be included in bankruptcy, over drafts, credit card debts , personal loans, Income Tax and VAT, any shortfall (negative equity) in the sale of a repossessed property, any arrears for rent, utility bills and most other unsecured debts other than fines and some council tax along with a few others will fall into Bankruptcy. Secured debts fall outside of Bankruptcy; for example a home you wish to retain, comes outside of bankruptcy, and as long as you are able to keep up the repayments on your mortgage your property should be safe in bankruptcy.

Bankruptcy Restrictions – Bankruptcy carries its own restrictions and includes not being able to borrow more than £500 during the term of bankruptcy without first declaring yourself bankrupt, you will not be able to obtain a bank account with any credit facility, although you can have a bank account, you cannot work as an MP or in some public office roles and there are other occupations i.e. in some financial sectors that will also be restricted by bankruptcy. We can tell you which professions are effected.

How long will I be an un-discharged Bankrupt – Bankruptcy lasts for a maximum of 12 months

Will it affect my credit rating –yes it will, but no worse than in an IVA, and in time if you so wish you can rebuild your credit history to its original health.

As with all debt solutions there are some negative effects that make Bankruptcy a serious step to take and one that you should not take lightly, the correct advice is very, very important so please call the AMS Debt Doctor team on 0800 612 2472 to find out which solution would work the best for you.

Bankruptcy – Have all of the facts good and bad !
Bankruptcy should only be used in extreme circumstances and where all other avenues have been exhausted.

Bankruptcy is a public process and your assets and disposable income are converted into cash to repay some of or all of your outstanding credit commitments to your creditors.

This section offers you an overview of the Bankruptcy process. If you have any questions regarding bankruptcy, please contact our advisors on 0800 612 2472 who will answer any questions that you might have.

How Does Bankruptcy Work?

Bankruptcy is a last resort for those who are insolvent, which means they are unable to pay back their debts.

A Bankruptcy Order is filed by either the individual or the lender at a county court. An Official Receiver finds out details of the debt and how it happened, which takes place through a course of meetings where the debtor must give information about their debt as well as their assets.

The bankruptcy order lasts between 12 – 36 months, lump sums will be made to creditors either through selling assets or contributions from income.

Details of the bankruptcy will be published in local newspapers and recorded on the Insolvency Register and with  Credit Reference Agencies. During the bankruptcy there are many restrictions, such as all bank accounts will be closed.

Alternatives

It is important to remember that there are other alternatives to bankruptcy. IVAs were introduced by the Government so that people could avoid having to declare themselves bankrupt. Please see our IVA page for more information.

If you find yourself in serious financial difficulties and want further bankruptcy information, please give AMS a call on 0800 612 2472 and let one of our specialist advisors help you through this stressful time.

What Service Will I Receive From AMS and it’s Partners What Does it Cost For That Service ?

Attached Below Is Our Bankruptcy Partners Customer Charter

A typical fee is around £800 per individual. On top of this will be Court Costs and fees to the Official Receiver. These total £700 per individual, these court costs must be paid in full to the court on the date of the hearing. Arrangements can be made for our bankruptcy fee (typical fee £800 pe individual as stated previously) to be collected in instalments (without any additional cost to the bankruptcy fees charged overall) whilst all arrangements are being put in place.
Our partners Claire and Paul at The Bankruptcy Team offer a totally bespoke service where the fee charged over and above £800 will vary dependent upon the complexity of the case e.g. number of properties involved,assets home and over-seas,businesses,employment etc. However before any agreement is signed a clear and transparent breakdown of these fees will be issued to the client for them to consider before they are asked to sign. The client will be taken verbally through these fees and how they are structured.

Description of services provided
We offer a free and unbiased inital telephone consultation giving a fair and accurate overview to bankruptcy. Fees will only be incurred once an agreement for services has been reached and are payable prior to appearance at the Courts.
We will complete the thirty three page document, and is known as the ‘Statement of Affairs.’ 3 copies will be included in cost.
We will complete the Debtor’s Bankruptcy petition, which is again a requirement to petition for Bankruptcy. 3 copies will be included.
We will supply a ‘Step by Step’ guide to the bankruptcy process and all this may entail as required.
We will give advice and guidance on opening bank accounts.
We will book you into court at a date convenient for you.
We will support you as much as possible and endeavour to answer any questions you may have during the process.
We will attend Court with you.
We will attend a ‘face to face’ Official Receivers interview. 1st party
We will attend a ‘face to face’ Official Receivers interview. 2nd party
We will help with further ongoing guidance should this be required i.e. communication and help with regards the Official Receivers requests following the bankruptcy order

Our Terms & Conditions Specifically Relating to Bankruptcy

AMS will:-

* Act on your instruction at all times in accordance with all relevant Legislations.

* Provide advice and discuss different processes to your financial difficulties.

* Negotiate with your creditors and/or their representatives on your behalf.

* Not make any promises or give any guarantees in respect of our endeavours in seeking a solution to your financial difficulties.

* Continue acting for you until a definite process has been found or a letter of termination has been sent and received by either party.

* Instruct an Insolvency Practitioner when their services are required e.g. an Individual Voluntary Arrangement or company Liquidation

* Hold and record your information on computer and paper based filed in accordance with the Data Protection Act. You are free to examine these records at any time.

* From time to time recommend the services  of other companies and individuals, which is done in good faith with no liability on the part of AMS in the event of a written complaint being made. AMS will acknowledge the complaint within 48 hours of receipt and will fully investigate and report their findings to both parties.

*Once the contractual period has ceased all retained paperwork will be returned to the client unless the client says that they do not want the paperwork.

You will:-

* Give written authority for AMS to act on your behalf.

* Provide true and accurate information at all times. If after investigation serious irregularities are discovered we reserve the right to charge additional fees if further work is required or to withdraw our services without any refund being given.

* Keep us informed of any change in your circumstances concerning your financial position.

* Be aware of the fact that some creditors may continue to add interest and charges onto your account, which will increase your total level of debt.

* Creditors are not obliged to accept reduced payments or to freeze interest and that, unless they do, repaying the same debt over a longer period of time will lead to an increase in the total amount to be paid.

* Also that collection action, including default notices, can ensue and that there is no guarantee that any existing or threatening proceedings will be suspended or withdrawn.

* Understand any course of action we undertake on your behalf is likely to result in a negative effect on your credit rating.

* Continue to make payments of priority debts including mortgage/rent, council tax and utility bills.

* Not ignore correspondence or other contact from creditors or those acting on behalf of creditors, in particular the issue of default notices or the threat of issue of legal proceedings.

* Have the right to cancel this agreement by writing to the Head Office of AMS at 48 Low Street, Portland Square, Sutton in Ashfield, Nottinghamshire NG17 1DG within 7 days of signing our bankruptcy contract. After this date there is a £750 administration fee that will not be refunded.

SERVICES OFFERED

Telephone consultation, Preparation of all Court Documentation, Book court date, Accompany to court, Accompany to face – to face Official Receiver Meeting, Step by Step Advice. Our fee will be determined by the amount of these services that are required and the complexity of the case as every bankruptcy is bespoke and treated as an individual case.

(Please note that at the time of publication June 2011 court fees are currently £700 per client and need to be paid directly to the court on the day of the hearing. All court costs are outside of our jurisdiction and can be altered by government at any time)

FOR OUR DEBT MANAGEMENT FEES CLICK ON THE WORDS “DEBT MANAGEMENT”

FOR OUR IVA FEES CLICK ON THE WORDS “IVA” AND SCROLL DOWN THE PAGE

For information regarding our other services that may be of interest, visit our Debt Management or IVA pages.